Baby Bankers! Children are saving for cars, university and houses, with many having £1,000 or more put aside

• Starling Kite, the debit card and app for kids, is now free and helps children learn essential money management skills

• One in ten UK children say they ‘already know all they need to know about money’

• A quarter get £10 or more a week in pocket money

13 October 2023: The UK is a nation of baby bankers, with children aged six to 12 already saving for adulthood, educating themselves on money management and demonstrating financial prudence.

A quarter of kids (26%) are saving for a car, the research from Starling Bank reveals, while a fifth (19%) are saving for university and 18% for a house as they look to prepare for their futures. One in 20 (5%) six and seven year olds have made significant progress on their saving goals, with £1,000 or more saved up separately to money set aside by their parents.

On average, children have £148 in savings, according to Starling Bank’s survey of 2,000 6-12 year olds. Kids in London have the most money to their name (£177) while those in Scotland have the least (£118).

What’s behind the savings spree?

High levels of financial prudence among today’s children could indicate why children are saving, with less than a fifth (16%) of children spending money as soon as they receive it. Those in the East of England and East Midlands are the speediest spenders, with nearly one in five (19%) immediately spending money they receive.

Children are taking it upon themselves to improve their financial literacy too, with 13% saying they have done their own research into how to be smart with their bank balance - including 10% of six year olds. A confident 9% say they ‘already know all they need to know about money’.

The rush to save could also be caused by high expectations of what’s normal when it comes to money in adulthood. Forty-three per cent think that 50 or younger is a ‘good age’ to retire, and that UK adults have £90,000 on average in their bank account. Meanwhile, one in ten (11%) think adults earn £300,000 or more on average a year.

The pocket money breakdown

Children receive an average of £6.10 each week in pocket money, peaking in London, where kids receive £7.80*, while those in the East Midlands receive the least (£4.30). Overall, a quarter of kids (25%) receive £10 or more each week.

Almost a third (28%) receive their pocket money directly to their bank. Among those who receive cash instead, a third (30%) wish they were paid directly into their bank, with ‘feeling more grown up’ (63%) a key motivation. Most children are paid in cash (62%) and a third 33% put it into a traditional piggy bank, while 15% keep their money in a box.

Rachel Kerrone, family finance expert at Starling Bank said: “Children are becoming increasingly financially savvy and learning the importance of saving from an early age. With such ambitious saving goals, it’s important for them to understand how to manage their money. Kite, our debit card and app for kids, allows them to learn how to save, spend and budget while tracking everything digitally, for free!”

Starling makes Kite free

The findings come as Starling Bank makes Kite, its debit card and app for children, free.

Kite is available for children in the UK aged 6-15 and previously cost £2 per month. Existing subscribers will automatically have the subscription fee waived from their next payment date, while new customers can benefit from the free service right away.

This is the latest in a series of updates made by Starling Bank to its children’s card and app, which includes KiteLink - a personalised digital link that friends and family can use to gift money to Kite customers instantly instead of sending cheques or cash.

Starling also pays 3.25% AER interest (variable)** on general account balances up to £5,000 for its adults’ Personal and Joint Current accounts, which include balances held in a child’s Kite Space. The rates are correct as of 9th October.

To open a Kite card and app, parents or guardians need a Starling personal account. In the app, tap ‘Spaces’ and select ‘Kite Space’. The Kite card and app can also be connected to an adult’s Joint account giving both parents visibility and control of their child’s financial habits.