Teen and tweeneconomics: a study into the teenage and tweenage pound in Britain: chapter 2.
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It’s approaching sixty years since the term ‘teenager’ was coined in the UK. O2 Money and LSE have worked in partnership to create a research report into youth spending, with an insightful look into the spending habits of 7-15 years olds across the UK.
Spending by young people has continued to rise despite drops in parental disposable income. For the first time, the spending power of Britain’s young people has increased during a recession. The average young person will spend over £6,000 between the ages of seven and fifteen, which equates to spending of £10.27 per week for seven to ten year-olds and an average of £15.25 per week for those aged between 11 and 15.
In total, young people are worth £4.89 billion to the British economy each year – twice the value of the UK toy industry. The spending power of young people has continued to increase significantly beyond the rate of inflation, meaning that in real terms, young people are wealthier now than they ever have been. In 1987, the average young person received £1.18 per week and this contrasts with £6.84 in 2009, an increase of 500 per cent.
However the spending power young people have on a weekly basis goes significantly beyond pocket money. Whilst their income is £6.84 per week, across the age groups, the same average spending figure is £13.10 – meaning that young people are accessing an additional £6.34 through part-time work, gifts from family or additional household chores to increase their spending power.
This increased spending power is in contrast to their parents, who according to recent research from the Post Office (Customer Insight Research, April 2009) have been cutting back monthly spending across many essential items as a result of the recession, in particular, reducing expenditure on food by an average of £56 per month, on clothes by an average of £35 per month and on Petrol by £34.20 per month. This would seem to suggest that parents are protecting their children from the direct impact of the recession.
In addition to research around young people’s spending patterns, this chapter highlights the importance of improving money management among young people in the UK. Much of the current focus of policy is on activity within the classroom. This report complements this by focusing on activities outside the classroom, by looking into how parents and other agencies might be involved in providing money guidance for the young.
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