GIVE it as a treat, withhold it as a punishment, use it as a learning tool, reward it for completed chores.

Reasons for giving pocket money vary widely — and many parents don’t give it at all.

While one recent study suggested that only half of British parents pay their children pocket money, new research has found that although just one in three pre-school children get a small allowance, by the age of seven the majority of kids (87%) are receiving pocket money.

The research, by the thinkmoney banking service, discovered that seven-year-olds receive, on average, £3.71 a week, or £193 a year.

Allowances increase when a child goes to high school, and the average 13-year-old receives £8.13 a week.

By the time they reach 16, children typically receive more than £10 a week, or £534 a year.

“Pocket money is a good way for children to understand the value of money and to get the budgeting habit early,” says thinkmoney spokesman Ian Williams.

“Parents can use pocket money as a reward for their child helping around the home or for great behaviour. And of course, parents should lead by example and only give what they can comfortably afford.”

Indeed, separate research by the money-saving brand vouchercloud.com found that 46% of parents don’t give pocket money to their children, with nearly half of them saying it was because they couldn’t afford it.

In addition, 42% of those who didn’t give their kids an allowance said they preferred to control their child’s spending.

Some mums and dads felt financial matters should be left to the kids themselves, with 20% saying they wanted their children to earn their own money, and another 13% insisting pocket money was unnecessary.

However, three quarters (76%) of the parents who didn’t pay pocket money admitted their children complained about it.

Agony aunt Suzie Hayman, a trustee of the parenting charity Family Lives, explains that parents will usually either look at pocket money as cash for kids to spend how they like, or as part of the budget that children are responsible for.

“I would very strongly advise that even from a very young age when you’re giving children money for treats, you still say that some should be put aside for things like buying presents at Christmas, or saving up for things they really want,” she says.

“As soon as you start handing over money, you should be handing over responsibility and the ability to start thinking about choices and priorities. Use it as a learning experience.”

She says that while this parental attitude should start when children are very young, certainly by the time children are at secondary school, parents should make it clear that pocket money is to pay for certain things, having discussed these responsibilities with the child.

The alternative, says Hayman, is the parents who want to use money to have more control over their child, by making them ask for whatever they want. “What that leads to,” she warns, “is arguments between parents and children.”

For more information visit: http://www.thinkmoney.co.uk/news-advice/a-guide-to-pocket-money-0-4461-0.htm