By David Field

According to some new research, there are an increasing number of parents that are refusing to give their children pocket money, opting instead to invest in their future through child trust funds or other means. Apparently, nearly half of parents with children under the age of 16 are choosing not to give pocket money, with 41 per cent deciding to make regular payments into savings vehicles as an alternative.

This trend, at first glance, appears to be an extremely encouraging development. For too long the UK has been stuck in a 'spend first save later' mentality that has seen the pensions crisis erupt and a culture of debt and bankruptcy come to the fore. Shouldn't saving on a child's behalf help combat this? If you're able to educate children at a young age about the benefits of saving rather than spending, then maybe they'll be more willing to do more of the same when they get to adulthood. They'll automatically consider savings as soon as they start working, and this whole issue of a savings gap will simply disappear.

On the other hand, though, there is a real danger in this kind of approach. The problem is that, through refusing to give children money of their own, you are robbing them of the opportunity to exercise any real responsibility over there money.

I know lots of parents who think that the lessons that come with pocket money are some of the most important we can learn in our childhood. The principle is sound enough. You give a child a small amount of money every week to do whatever they like with. This could even be payment for chores done around the house, or a reward for good behaviour. Obviously, the child can choose to immediately run down to the corner shop as fast as their little legs can carry them and spend it on sweets. In fact, that's probably what they will do. But then they'll quickly realise that all of their money is gone, and they can't afford to buy anything else until next Saturday comes around.

Don't get me wrong - I think child trust funds are a great idea. They give young people a big chunk of money precisely when they need it most, with the cost of education rising all the time and tuition fees risking making higher education elitist once again. All I'm saying is that they shouldn't be used as an excuse not to give pocket money to children. Without that experience of handling and managing their money, aren't teenagers going to raid their trust fund as soon as they get their hands on it? The only difference will be that the pub will be the first stop on this spending spree, not the sweet shop.