What this guide is about
Money mostly comes from work. Grown-ups do jobs that help other people, and those other people pay them. The money goes into the bank, comes out when needed, and gets spent on food, houses, clothes and treats. Then it goes to the people who run the shops, who pay their workers. The money is always moving.
Most money comes from work
When a grown-up does work that helps someone else, that other person gives them money. We call this a wage or a salary.
Some examples:
- A teacher helps children learn. The school pays them.
- A nurse helps people get better. The hospital pays them.
- A baker bakes bread. People buy the bread and give the baker money.
- An engineer builds things. The company pays them.
All of those grown-ups go to work and come home with money — usually paid straight into their bank account. They didn't make the money themselves. They earned it by doing something useful.
Then the money moves to a bank
When grown-ups get paid, the money goes straight into a bank account. The bank looks after it. The grown-up can see it in an app on their phone.
They use the money for things they need:
- The supermarket for food
- The landlord (or the bank) for the house
- The energy company for gas and electricity
- The phone company
- The bus or petrol station
Each of those payments moves the money from the grown-up's bank account to someone else's bank account. The money never sits still for long.
And then it moves again
The supermarket got money from your family's food shop. Now the supermarket has to:
- Pay the workers who stack shelves and serve at the till
- Pay the farmers and factories that made the food
- Pay the people who delivered the food in lorries
- Pay rent on the supermarket building
So the money your family spent at the supermarket goes out again — to many different people who did different jobs. Each of those people will then spend their money somewhere else, and so on.
This is what people mean when they say "the economy". It's just a big word for all the money moving around between people every day.
But where did the money come from at the start?
Good question! Most money in the UK started life as banknotes and coins made by the Bank of England (notes) and the Royal Mint (coins).
- The Bank of England is the special bank that makes the £5, £10, £20 and £50 notes. They're in London.
- The Royal Mint makes all the coins. They're in Wales.
But today, most money isn't actually paper or metal. It's digital — just numbers in computers. When a grown-up's wage gets paid, no banknotes are actually moved. The bank just changes the numbers in two computer accounts: takes some away from one and adds it to another.
The total amount of money in the country is controlled by the Bank of England. They can make more (carefully) when the country needs it, and they can make money slightly more or less valuable by adjusting something called interest rates — but that's a story for when you're older.
Other ways grown-ups get money
Most money comes from work, but not all of it. Here are some other ways:
- Running a business. If a grown-up starts a shop, a website, or a small business, they get the money that comes in — minus what they pay their workers and their costs.
- Pensions. When grown-ups are old (usually 67+) and stop working, the government and their old workplace pay them a pension — money for the rest of their life.
- Benefits. If a grown-up can't work because they're ill or looking after children, the government may help with payments called Universal Credit.
- Investing. Some grown-ups own small parts of companies (called shares) and earn money when those companies do well.
- Gifts and inheritance. Sometimes families pass money down to children when they die.
Most grown-ups have one main way (a job) and a few smaller ones. You'll learn about all of these when you're older.
What about your money?
Your pocket money comes from someone in your family. They earned it from their job, put it in their bank, and then gave you some of it.
When you spend your pocket money — on a magazine, a snack, a small toy — that money goes to the shop. The shop pays its workers. The workers spend it. And it keeps moving.
One day, when you have a job, money will come to you in the same way. That's how it works for everyone.
For teachers: curriculum links
- England — PSHE Association KS2 L17 (managing money), L18 (where money comes from)
- England — Citizenship KS2 (rights and responsibilities, the economy)
- England — Maths KS2 (money, addition, subtraction)
- Wales — Curriculum for Wales Progression Step 2-3 (HWB AoLE, Humanities AoLE)
- Scotland — Curriculum for Excellence MNU 2-09a, SOC 2-15a
- NI — PDMU KS2, World Around Us KS2
Full mapping in the curriculum map.
UK Tax Drag (2026). Where does money come from?. Ages 8–9 guide. Available at: https://kids.uktaxdrag.co.uk/ages-8-9-where-money-comes-from.html
Curriculum mapping: see UK Financial Education Curriculum Map (Version 1.0).