Last updated: 4 November 2026. General information for UK families. Junior ISA figures for the 2026/27 tax year.
Children start forming money habits much earlier than most of us think. Watching how we shop, hearing “we can’t afford that”, tapping a card at the till: it all sinks in. The good news is that you don’t need to be a money expert to teach them well. Small, regular conversations and a bit of real-life practice go a long way.
This guide gives you simple, age-by-age ideas, practical pocket money tips, and an explanation of kids’ bank accounts and Junior ISAs.
Why it matters
Money lessons at home help children:
- Understand that money is earned and limited
- Learn to wait and save for something they want
- Make small mistakes now, when they’re cheap, rather than with a credit card later
- Feel confident, not anxious, about money
In England, financial education is part of the secondary school curriculum, but what happens at home still makes the biggest difference day to day.
Ages 3 to 5: money is real and it runs out
At this age, keep it hands-on and simple.
- Play shops with real coins. Let them count and “pay”.
- Use a clear jar so they can see money grow when they save.
- Talk out loud at the supermarket: “We’ve got £5 for snacks this week. Shall we get these or those?”
- Explain cards: tapping a card spends real money from the bank. It isn’t magic.
- Practise waiting: “If you save your coins for three weeks, you can get the bigger toy.”
Key idea: we swap money for things, and once it’s spent, it’s gone.
Ages 6 to 10: earning, saving and choosing
Children can now understand choices and goals.
- Start pocket money (see below), with a simple rule for spending and saving.
- Use three jars or pots: Spend, Save, Give.
- Set a savings goal with a picture on the jar and a tracker to colour in.
- Let them make small mistakes. If they spend it all on day one, don’t top it up. Talk about it kindly.
- Compare prices together: “This one’s £2 and this one’s £1.50 for the same thing. Which is better value?”
- Introduce needs and wants: food and school shoes are needs; a new toy is a want.
Key idea: you can’t have everything, so choose what matters most.
Ages 11 to 13: managing money more independently
Secondary school often brings more independence, like buying lunch, snacks or bus fares.
- Give a weekly or monthly budget for some of their own costs (snacks, lunch top-ups, activities) so they learn to plan.
- Open a children’s bank account or a parent-controlled card app, so they learn about balances and digital spending.
- Talk about online spending: in-game purchases, subscriptions and “free” apps that aren’t really free.
- Explain interest with a simple example: money in savings earns a little extra; borrowing costs extra.
- Watch out for scams together: fake giveaways, “you’ve won” messages and gaming scams.
Key idea: plan ahead so the money lasts.
Ages 14 to 16: real-world money skills
Teenagers can handle real responsibility and real conversations.
- Monthly allowance that covers clothes or phone top-ups, so they budget for a whole month.
- Part-time work: from 13, children can do some light part-time work, with limits on hours set by law and local councils. Talk about payslips, tax and National Insurance (they’ll get their National Insurance number before 16, if you claim Child Benefit).
- Introduce budgeting: a simple money in / money out list, or the 50/30/20 rule.
- Talk about debt: how credit cards, Buy Now Pay Later and overdrafts work, and why they cost money. My Debt and Credit hub explains the basics.
- Talk about the future: student loans, saving for driving lessons, and how pensions work.
- Let them manage their Junior ISA (from 16; see below).
Key idea: earning, saving, borrowing and giving are all choices with consequences.
Pocket money: how much should you give?
There’s no right amount. It depends on what you can afford, your child’s age, and what you expect the money to cover. A few approaches that work:
- Age-based: some families give £1 a week per year of age (so £7 for a 7-year-old). Adjust to suit your budget.
- Cost-based: if the money has to cover lunch, travel or clothes, it needs to be bigger than “treat money”.
- Small and consistent beats big and random. Regular amounts teach planning.
Should pocket money be linked to chores?
Families do this differently, and there’s no single right answer:
- Basic pocket money, no strings: teaches budgeting without making helping at home “optional”.
- Earned for extra jobs: basic chores are just part of family life, but extra jobs (washing the car, big garden tidy) earn extra.
- Fully chore-based: teaches that money is earned, but can lead to “how much will you pay me?”
Many families find a mix works: a small basic amount, plus the chance to earn more.
Pocket money rules that help
- Pay on the same day every week or month
- Agree what it’s for (sweets? toys? clothes? phone top-ups?)
- Don’t bail them out every time, or the lesson is lost
- Encourage a save portion, for example 20% straight into the save jar
- Match their savings occasionally, like a mini “employer pension”, to show how saving grows
Kids’ bank accounts and cards
- Children’s savings accounts: many banks offer these, often from birth, with parents managing them for young children. Some pay competitive rates. See my best UK savings accounts guide.
- Children’s current accounts: usually from about age 11, with a debit card but no overdraft.
- Prepaid card apps: parents load money and set limits, and children can see their balance in an app. Some charge a monthly fee, so check if it’s worth it.
Tax on children’s savings: children get their own Personal Allowance and savings allowances, so most pay no tax on interest. But if money you give your child earns more than £100 of interest a year, GOV.UK says the whole amount is taxed as your income. Money from grandparents or others doesn’t count towards this, and Junior ISAs are tax-free.
Junior ISAs (2026/27)
A Junior ISA is a tax-free savings or investment account for children. According to GOV.UK:
- Your child must be under 18 and living in the UK
- Up to £9,000 can be paid in each tax year (by parents, grandparents, friends or anyone)
- There are cash and stocks and shares Junior ISAs
- A parent or guardian opens it, but the money belongs to the child
- Your child can manage the account from 16, but can’t withdraw the money until 18
- At 18, it becomes an adult ISA, and the money is theirs to use however they choose
Stocks and shares Junior ISAs can go down as well as up, but over 10 to 18 years they may grow more than cash. My ISAs explained guide covers the differences.
Think about: your child gets full control at 18. Many parents start talking about what the money is for (university, driving, a house deposit) well before then.
Child Trust Funds: check for lost money
If your child (or you) was born between 1 September 2002 and 2 January 2011, they probably have a Child Trust Fund set up by the government. Many have been forgotten. You can find a lost one through GOV.UK for free. At 18, the money can be taken out or moved to an adult ISA.
Simple family money habits
- Talk about money openly, without stress. “We’re choosing to save for our holiday” is better than “we’re broke”.
- Involve kids in real decisions: planning a day out on a budget, or comparing two prices.
- Use savings challenges as a family. My savings challenges work for kids too (try a 1p challenge for a month).
- Show them your own good habits: checking a receipt, using a shopping list, saying no to impulse buys.
- Give, not just spend: let them choose a charity or donate toys.
Teaching kids about money: people also ask
At what age should you start teaching kids about money?
From around 3, with simple ideas like coins, saving in a jar and waiting for things. Build up gradually as they grow.
How much pocket money should I give my child in the UK?
There’s no set amount. Some families give £1 per year of age per week; others base it on what the money needs to cover. Choose what you can afford and keep it regular.
Should pocket money be earned?
It’s up to you. Many families give a small basic amount plus extra for bigger jobs, so children learn both budgeting and earning.
How much can you put in a Junior ISA?
Up to £9,000 in the 2026/27 tax year. The money belongs to the child and can’t be taken out until they’re 18.
Can my child get a bank card?
Many banks offer children’s current accounts with a debit card from about 11, and there are prepaid card apps for younger children with parental controls.
How do I find my child’s Child Trust Fund?
Use the free “find a Child Trust Fund” service on GOV.UK. It applies to children born between 1 September 2002 and 2 January 2011.
Summary
- Start early with coins, jars and simple choices, and build up as they grow.
- Pocket money works best when it’s regular, with clear rules about what it covers.
- Give real responsibility to older children: budgets, bank accounts and part-time earnings.
- Junior ISAs allow £9,000 a year tax-free in 2026/27, and check for a lost Child Trust Fund.
Next step: try a family savings challenge, or read my Child Benefit guide.
General information only, not financial advice.
Sources (checked 4 November 2026): GOV.UK: Junior Individual Savings Accounts · GOV.UK: Child Trust Fund · GOV.UK: tax on children’s savings · GOV.UK: child employment · MoneyHelper: teaching children about money