New research from payments company Caxton reveals the income and spending patterns of ‘cashless kids’, as more and more childhood spending moves online.
The research is based on an analysis of more than 33.5 million individual income and spend records worth a combined total of more than £250 million. The payments were made between 2017 and 2024 on nimbl, a prepaid debit card aimed at children aged 6 - 18.
The data shows that, where once pocket-money meant five pounds per week stored in a piggy bank, today’s children are far more sophisticated in their approach to money, with ever more cash managed digitally, reflecting broader societal trends toward a cashless society.
The average digital income of children grew from £164 to £367 over the time period covered by the research. This represents an increase in digital pocket-money of around 14% per annum and, as more families and children embrace digital payments, this trend is likely to accelerate.
The report reveals however that growth in digital spending power is not uniform across different age cohorts. While seven year olds saw their digital spending power grow by on average 28% per year over the research timeframe, older spenders age 18 saw less growth, at 9.95%. Those who were eight years old in 2017 on the other hand have seen their pocket-money rise from £66 per annum in 2017, to more than £527 per annum now, an eight-fold income increase.
Just as the digital income of cashless kids has grown over the period 2017 - 2023, so too has digital spending. Caxton’s report reveals that average annual spend per child has grown from £157 in 2018 to £343 in 2023, a 118% increase. This spending compared to income means children spend on average 88% of their income, representing a chance for further financial education and for products that can help kids save the remaining 12% of the digital cash.
As expected, cashless kids’ spending is heavily concentrated annually around the Christmas period. Nearly half of all transactions take place in December, with a further 15% taking place in January. Spending decreases in the summer meanwhile when kids are out and about and less online, with the summer months between them accounting for just 10.5% of spending. The data also reveals how spending on gaming decreases during the summer months.
Overall however, the data reveals that a growing share of childhood spending is going to digital first products such as gaming and also digital retailers. Gaming accounts for nearly a third of all spending, while online shopping via Amazon accounts for a further 27.2%. Our cashless kids are still getting out and socialising however, with trips to grocery stores and fast food restaurants accounting for nearly a fifth of all spending. Reflecting the changing nature of play however, spending in hobby, craft and toy stores is just a fraction of what is spent on gaming, at 5%.
Commenting on the latest findings, Rupert Lee-Browne, CEO and Founder, Caxton said:
“We’ve come a long way from childhood cash revolving around the piggy-bank on the bookshelf and this data gives a fascinating glimpse into how childhood spending is changing. Not only is the digital spending power of children growing, businesses too are responding with digital first products such as gaming, reflecting the changing tastes of cashless kids.
“For parents, businesses and policy makers too, this data has significant implications. Ever more detailed data about childhood spending offers a powerful means of guiding young consumers through childhood and into an adulthood of sustainable choices and sound financial habits.
“It also means financial risk is changing for kids, with more exposure to potential online harms and scams. Likewise, as digital spending grows, it will be incumbent on businesses to not just build responsible and sustainable products for cashless kids, but also to lean into the customisation that twenty-first century consumers of all ages increasingly demand.
“Children are becoming increasingly sophisticated consumers as patterns change and cashless society empowers them with security and freedom. Growing volumes of spending data means cashless kids can be stewarded through an ever more online world, and encouraged to spend and save responsibly.”