Traditional pocket money is dying out, as one third of parents now transfer money into a digital bank account rather dole out cash to their kids.

That’s according to research from Intelligent Environments, which surveyed 2,000 parents about the way they gave their children an allowance. While 34 per cent of parents opted to transfer a weekly amount into their children’s bank accounts, a quarter paid their children in digital currencies for use in gaming communities such as Minecraft and Moshi Monsters, or online services like iTunes. Four in ten of those polled chose not to give their children any pocket money, instead preferring to transfer the funds into a savings account.

The majority of parents (80 per cent) said they had already introduced their children to money management from a young age, because they believed it was a valuable life skill. But with only two High Street banks catering for children under the age of 11 (HSBC and NatWest offer youth accounts for kids aged seven upwards), Intelligent Environments called for more UK banks to provide current accounts and digital money management tools for younger children.

David Webber, managing director at Intelligent Environments, added: “Nothing has changed more than the way in which we manage our money; our research shows that in a world of apps, e-books, digital music, and online games, more children than ever are asking for their weekly allowance digitally to fuel modern-day spending such as in-app purchases, in-game currency and digital music downloads.”

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