How your kids can start making money

Earning money through household chores is a good way for children to save some extra cash and develop a savings habit. But what other jobs can they do and where's the best place to earn interest on the cash?

Making money as a child is hard. Buying the latest toy can take weeks of saved pocket money.

Today 63% of kids aged between eight and 15 are boosting their income by doing chores around the house.

The most popular way children are topping up their pocket money is by cleaning their bedrooms, while 25% get money for washing up and 21% for cleaning, according to the research from Halifax.

The study also showed that when children had money queries 59% would prefer to learn the answers from their parents.

When asked what particular part of personal finance they want to know about, encouragingly 59% said savings, while 54% chose bank accounts and only 20% showed an interest in credit cards.

Clearly young people are open to engaging with money. So if they want to earn a few extra pennies, and not just by doing a bit more around the house, what are their options?

Where can children work?

There are Government rules surrounding when and where young people, aged under 18, can work and for how long. 

Aged under 16:

The days of young boys climbing up chimneys to make money are thankfully long gone and there are now strict rules in place to safeguard children from dangerous work.

No one aged under 16 is able to work in anything other than what is described as ‘light work’, such as babysitting or a newspaper round.  For example, it’s illegal for a young person to be employed in a factory or in construction work, in transport, in a mine or on a registered ship. A full list of exclusions can be found at the Citizen’s Advice website.

These rules apply throughout the UK, but local authorities often have by-laws restricting certain areas and times young people can and can’t work.

Aged 16-18

As soon as I turned 16 I got a job at a well-known retailer and had a weekly shift on a Saturday. Although it was a busy job and I didn’t earn much, it was still a way to begin earning some extra cash.

When you turn 16 the national minimum wage kicks, which is currently £3.68 an hour. And although the scope is wider for where you can work, there are still some restrictions in place. People in this age group for example can’t work in a bar when it is open for the sale of alcohol unless you’re there as a part of a training scheme.

What’s the best way for children to save money?

Earning money from household chores, babysitting, holding 'bring and buy sales' or delivering newspapers can be  a good way to start your children saving for their future. Even if they don’t make much money, this still encourages them to think about starting a savings habit.

Putting the money away into a savings account is a good way to teach children about the benefits of earning interest. Although the rates aren’t as competitive as those found on adult accounts, the cash will still make more interest than if it were left in a current account.

Some accounts stop once a child turns 16. At this point they can transfer a lump sum over to an adult account. They could also open a cash ISA, which would mean the interest earned would be tax free,up to the yearly limit. 

To make sure the interest is received tax free on a children's savings account, you or your child will need to fill out an R85 form for each account. Full details of the tax benefits can be found in our article and a round-up of all the accounts on the market can be found on our comparison table.

Here I’ve picked out five of the best. As you can see the first two are regular savers, where you can only put away a certain amount each month, while the others are all instant access.

The top children’s savings accounts

 More on savings:

The best instant access savings accounts

The top alternatives to ING/Barclays

M&S Bank offers regular saver account paying 6%

The best Junior ISAs

Top savings accounts for kids!