Falling oil prices and the economic recovery means 2015 could be a “game changer” for parents….
It has been found by the Institute for Fiscal Studies that falling oil prices and the economic recovery is leading to parents enjoying a ‘game changing’ 2015.
According to Fiscal Studies the rise in wages and low inflation is set to lead parents to have a larger amount of disposable income per month in their pockets.
Increased disposable income
Andrew Goodwin, Senior Economist at Oxford Economics commented:
“Certainly our experience is when consumers see this sort of boost, they tend to go out and spend. People have that pound in their pocket, they tend to go out and spend it.”
However, with this additional amount of money in the British family wallet, it must be considered what parents are teaching their children regarding spending.
According to the analysis by Fiscal, the average amount families will be taking home will rise by £417 – equivalent to 2.4% each year. This figure represents parents’ income after tax, mortgage and national insurance payments have all been made.
Setting a good example
However it is thought that despite this increase there is still a long way to go for the average family to recover from the recent financial crisis that Britain has witnessed.
With the amount of disposable income on the rise in the average British family, it should be considered what this money will be spent on.
With Personal Finance Education (PFE) being taught in secondary schools as part of the national curriculum in the UK, children are set to become increasingly aware of spending habits and financial matters within the family home.
As a result, it is more crucial than ever before for parents to consider the effects their spending habits will have on their children’s future.
With the political future of England currently up in the air, this additional money should be placed in savings accounts in order to accommodate family life over the upcoming years.
This change in the amount of family income in the average home has also brought about discussion on whether parents could also benefit from financial education in order to set a good example to their children.