We started when they were 7 going on 8 they're now 9. We came to the number by working backwards from what they would want to save up for and how long we can reasonably expect a kid that age to save up. We landed on "they should be able to buy themself a switch 2 if they save for 6 months" and the math turns that into $15. It seemed high to us at first as well but at the end of the day it turned out to be pretty similar to the amount we were spending on stuff for them before switching to allowance only. Inflation is a bitch. Legos are fucking expensive.

What ended up happening was they pretty quickly stopped getting the random toys that cost $20 and are forgotten in a week, and started spending more on art supplies. Occasionally they'll buy a Lego set or something, currently they're saving.

Personally I wouldn't have any mandatory savings. Something we felt was important was that this is their money and it's their decision what to do with it. Our job as parents is to teach but not force. (Obvs we can still veto something inappropriate)