Pocket Money For Children: How It’s Changed Over The Past 20 Years

School-going children in Singapore are often given a token sum of pocket money, usually to purchase food and drinks at our school canteens. Parents need to decide how much to give their children, which begs the question – are parents are giving more or less pocket money now?

Every five years, the Singapore Department of Statistics conducts the Household Expenditure Survey. The Survey collects detailed information on what households in Singapore are spending on, as well as other socio-economic data. One of the expenses surveyed is pocket allowances for children. 

While the data does not tell us specifically how much money each child gets on average, the Household Expenditure Survey nonetheless still gives us some insight into the role of pocket money in the household budget.

Read Also: Singapore Consumer Price Index 2024: How Households Are Spending Their Money

All Resident Households

The average monthly amount of pocket money per household has been decreasing since 2003, with only 2023 bucking the trend. 

While it’s also interesting to see that pocket money as a proportion of household expenditure is now less than half of what it used to be 20 years ago, it could also be a result of fewer children in households today. 

Another important question is, can we expect to see the same trend across income levels? A deep dive into the data across 5 income quintiles revealed some interesting observations.

#1 Income Group: Highest 20th Percentile (81st To 100th Percentile)

Among the households with the highest income, pocket money made up approximately the same proportion of household expenditure over the past 20 years, with a noticeable trend down. 

When compared to the rest of the country, this highest income group consistently gave the smallest proportion of household expenditure as pocket money, as well as the lowest average monthly amount. However, this latter number is affected by several factors, such as having more children in a family, the values of which were not captured in the data.

One “non-scientific” example that comes to mind is that the highest income-earning households may have adults that are further along in their careers, and potentially with children who no longer collect pocket money or even live with them anymore.

#2 Income Group: 61st To 80th Percentile

In the next highest income quintile, we find that pocket money makes up a bigger proportion of household expenditure, compared to the top income quintile. In fact, we will see that the second and third income quintile spent more on pocket money than the top income quintile.

We also see that the average monthly amount jumped significantly in 2023, while the proportion of household expenditure remained the same. Looking at the statistics more closely, we can also observe that the top and second income quintiles experienced the highest increase in pocket money expenditure in 2023.

The top income quintile spent 34.46% more, while the second highest income quintile spent 25.23% more. This may imply that the cost of food and drinks in schools have gone up significantly in the past 5 years – as these two income quintiles are in the best position to give their children more money rather than try to cut back.

Read Also: How Much Does The Average Singaporean Household Spend Each Month On Groceries?

#3 Income Group: 41st To 60th Percentile

We see a similar trend in for this income quintile, where the proportion of household expenditure remains largely the same for 10 years between 2013 and 2023. Similarly, the average monthly amount jumped significantly in 2023, but lower than the top two income quintiles.

Once again, this seems to suggest that household expenditure for this income quintile increased in 2023, which then had a trickle-down effect to the average monthly amount given as pocket money.

#4 Income Group: 21st To 40th Percentile

When it comes to the two lowest income quintiles, a slightly different picture emerges. While this income quintile previously marked a larger proportion of household expenditure for pocket money, over 20 years, it dropped to half by 2013, and one-third by 2023.

There may be two possible factors for this. Firstly, it may similarly imply that these households are also having fewer children today, and secondly, that these households may not be in as strong a financial position to give their children more money to combat inflation in the school canteens.

#5 Income Group: Lowest 20th Percentile (1st To 20th Percentile)

Like the income quintile before this, we see that pocket money used to make up a larger proportion of household expenditure, but over the past 20 years has dropped to about half in 2013 and one-third by 2023. 

What is interesting is that the Singapore Department of Statistics also notes that in 2023, some resident households in the lowest 20% lived in private property (8.4%), owned a car (17.0%), and employed a domestic helper (16.9%). This additional information suggest that there may be a significant portion of households in this income quintile that may be well-to-do and possibly nearing retirement given their lower income.

Why Does Pocket Money For Children Remain Low Even As Household Expenditure Rises?

Since the main intention of pocket money for children is to allow them to buy food and drinks from their school canteen, it is not entirely surprising that the amounts tend to remain the same over 20 years. 

This is because MOE places pricing guidelines on school canteen stallholders to ensure that canteen food remains affordable to all. This means that even when household expenditure rises due to inflation, the amount a child needs to buy food and drinks may not rise as much.

Read Also: How Much Money Are Parents Giving Their Primary School Kids?

The post Pocket Money For Children: How It’s Changed Over The Past 20 Years appeared first on DollarsAndSense.sg.