New research shows that parents are using pocket money to teach their kids the value of the humble pound.

Kids are growing up faster than ever nowadays, and parents are using this fact to educate their kids, from an early age, about monetary responsibility through pocket money. No longer is it just money to burn, it comes at a price.

New research shows that 70% of parents use pocket money to teach their children about the value of money – whether this be saving, managing or earning it. Only 19% have no hidden agenda and see pocket money purely as something to be enjoyed.

Zapf Creation, a leading doll manufacturer, conducted the survey of 1,000 parents to find out how and why they give pocket money to their children. It has recently launched a new product, BABY born Miniworld; a small version of its popular BABY born doll that come with a mini room set, which is perfect for pocket money budgets. Parents appear to be far more aware that their children will need to manage their money effectively as they get older, due to issues such as increasing house prices, paying for university fees, debts from university (averaging £10 - £15,000) and longer life spans.

Dr Pat Spungin, a child psychologist and founder of parenting site raisingkids.co.uk who worked with Zapf Creation on the survey, comments, 'Parents seem to be more conscious of the pressures of modern living on the bank balance and are now using pocket money to teach their kids about saving and budgeting from an early age. Things that were taken for granted when I was young, such as being able to own your own home, are no longer a given so it’s more important than ever before to develop sensible attitudes to money management.'

The survey found that parents can be classified into four main groups, depending on their attitudes to pocket money:

The 'Browns' (Savers)
28% of parents’ say the main reason for giving pocket money is so that their children learn about saving. 40% of parents insist that their children save, and the lesson seems to be rubbing off with 34% of their children choosing to save some of their pocket money. They place a high importance on having savings and want to instill this in their children so that they learn to invest in their future. The Browns won’t give their children extra money if they want a specific item and will encourage them to save up for it instead.

The 'Bransons' (Money managers)
The Bransons give pocket money so their children learn to be sensible about money. These account for 27% of parents and they will tend to either make their children save if they want a specific item or will give them extra money in return for doing chores, to make the connection between money and work. The Bransons want to teach their children about the value of money and how to juggle the money they have to pay for the different things they want. They encourage their children to think about what they want to buy and to manage their money effectively to be able to do this.

The 'Beales' (Earners)
The Beales don’t give pocket money at all - their children have to earn it, which they do by helping in the house and doing chores. They account for 15% of parents. The Beales will give extra money, but only in return for doing extra chores. They want to teach their children the value of work and the fact that work earns money, which in turn means you can buy the things you want.

The 'Beckhams' (Spenders)
Only 19% of parents have no hidden agenda and see pocket money as ‘spending money’ to be enjoyed and disposed of as their children wish. The Beckhams will dish out extra cash fairly regularly, while a few admit to constantly ‘forking out’. They don’t place any importance on managing money or saving and possibly see their children as too young to be learning about this. They believe childhood is a time for fun while responsibility can come later on.

Dr Pat Spungin comments, 'The way that parents give money to their children often has a direct correlation to how their children deal with money in later life. So those who focus on saving and money management will tend to have children who look at what money they’ve got and think carefully about what they do with it. Spenders’ children will be those who don’t think about money so much; they may go on to possess numerous credit cards and will tend to overspend rather than save up.'

Other findings from the survey were:

• Only 4% of parents said they would give their children a lot more money if they could afford it, with most believing that they get enough already.
  
• 86% of children do have some savings, however most of this does not come from their pocket money.
  
• Presents and gifts are the main source with 19% of parents actually saving on behalf of their children, often using their child benefit. Many respondents said the reason for these savings is for education and the future.
  
• Parents are the main source of money but most children do have at least one other source; grandparents are the main providers of this extra money.
  
• 56% of children spend their money on treats i.e. sweets, crisps and junk food; however many children also spend money on books (21%), magazines (44%) and collectible toys (18%).
  
• 70% of parents attempt to limit the amount their children spend on junk food etc.
  
• Average pocket money rises from 94p for 4 year olds, to £3.22 for 11 year olds.

Notes to Editors:

• Case studies are available on request (tbc)
• All respondents were UK-based parents with at least one child between the ages of 4 and 11
• The research was carried out via an online survey on www.raisingkids.co.uk
• BABY born Miniworld costs from £2.99 - £11.99 and is available from all major toy retailers

Zapf Creation AG is Europe’s leading brand manufacturer of play and function dolls as well as its accessories. Today’s top selling brands are BABY born®, CHOU CHOU and Baby Annabell®. All Zapf Creation brands conform to the highest demands of design, quality, safety and play value. Zapf Creation strengthens its global market leadership in the doll segment with its major subsidiaries in the Czech Republic, Great Britain, France, Spain, Italy, Hong Kong as well as in Australia and the United States. The company with headquarters at Roedental/Germany currently employs 514 employees worldwide and reported sales of €193.1 million for the year 2001, a growth of 17 percent in respect to the previous year. The Zapf Creation AG, founded in 1932 by Max Zapf, was acquired in 1992 by TA Triumph-Adler AG and in April 1999 successfully introduced to the stock market (MDax:ZPF). For further information, please visit www.zapf-creation.com.

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