"Pocket money" toys that actually fit in your pocket are becoming increasingly popular in struggling toy stores as parents look for cheaper play sets and kids collect mini figurines based on movies and TV shows.

UK toy sales fell 3.7% to £3.4 billion in 2024, according to market research firm Circana's annual industry report. While the headlines have been described as "resilient", there have been bright spots as toy collecting takes off among Brits of all ages.

With families still struggling with the cost of living, latest statistics show that 80% of toys sold in the UK last year were priced under £15, with these cheaper action figures and plush toys combined accounting for around £15 of the industry's total. half sales.

Meanwhile, 'pocket money' toys priced under £10 account for close to 30% of sales. The best-selling toy for the second year running is the Squishmallows cuddly toy, which sells for just under £9.

Melissa Symonds, executive director of toys at Circana UK, said consumers were "reducing their impulse purchases as they have been affected by the UK's economic difficulties over the past two years".

The fortunes of the UK toy industry are increasingly linked to the growing army of deep-pocketed children (buyers aged 12 and over), who account for almost 30% of toy sales. They are a big part of the LEGO fanbase and have enough money to buy complex sets, which increasingly cost hundreds of pounds.

Sales of building sets, led by Lego, rose 6%, with its Botanics line of floral sets attracting older female builders to the Danish toy giant. There was also demand for toys related to popular screen characters such as Lilo & Stitch, Despicable Me and Bluey, with sales of licensed products up 3%.

Research shows that children and adults alike are enthusiastic about gathering their favorite cuddly toys and figurines, from adorable Squishmallows and Jellycats to Sylvanian Families and Funko Pop! number. Circana said one in five toys sold were collectibles, with an average price of £7.59, while stickers and trading cards were also popular, according to figures released at the start of the annual London Toy Fair.

But even in the world of collectibles, new trends are emerging. Kerri Atherton, head of public affairs at the British Toys and Hobbies Association, welcomed the rise of "miniature collectibles" - toys less than 5cm tall - pointing to the demand for Lego minifigures or Bitty Pop! Characters also produced by Funko are also popular.

"We're seeing excitement about these little toys that not only have a significant cuteness factor but are also expensive," she said, noting that sales of miniature collectibles grew 18% in 2024.

While toy stores experienced a "surge" in the week before Christmas, figures show it wasn't enough to prevent sales falling for a fourth consecutive year. Official data last week showed retail sales fell 0.3% month-on-month in December.

"These latest figures are undoubtedly influenced by the current unstable economic situation, which is affecting spending on a variety of consumer goods, including toys," Atherton said.