It found that parents are now leaving £5 or £10 notes under their children's pillows instead of the more traditional coins due to inflation and wage increases.
Just under one in ten children (9 per cent) get £10 per tooth - amounting to £200 for a full set of all 20 baby teeth. The average payment from the Tooth Fairy is £2.10 per tooth - up from £1.50 five years ago.
Tooth Fairy payments vary according to where you live in the country. London and the south-east has the highest payments - at an average of £2.50 a tooth. The Tooth Fairy is most careful in Newcastle where kids get an average of £1 per lost tooth.
The results come from a new survey of 1,000 parents by Carisbrook Dental in Manchester, Britain's leading private dental practice. It found that 27 per cent of children get a £1 coin for each lost two, 25 per cent get a £2 coin, and 14 per cent get less than £1 - most typically 50p.
A further 12 per cent get £5, 9 per cent get £10, 3% get between £10 and £20 and 2 per cent get more than £20. Only 8 per cent of kids never receive a visit from the Tooth Fairy.
Nine out of ten parents (92%) said their children under five believed in the Tooth Fairy - the same figure as for Santa Claus. More than a third of parents (36 per cent) admitted that their children spent their Tooth Fairy money on sweets. A further 31 per cent spent it on toys, with savings (21 per cent), books (7 per cent) and clothes (5 per cent) the other most popular answers.
Dentist Tariq Idrees, owner of Carisbrook Dental, said, "The Tooth Fairy is a much loved family tradition and a very good one.
"At Carisbrook Dental we tend to find that parents and children who are most excited by the Tooth Fairy and make sure that it visits with each lost tooth also take dental care most seriously, too. They tend to be the children who brush their teeth most regularly with little parental pressure and suffer the least tooth decay.
"It is shame that 36 per cent of children are spending their Tooth Fairy money on sweets.
"I think Tooth Fairy payments are a good indicator of the nation's general economic health - so it has to be good news that payments are increasing."
Tariq said most children have a full set of 20 milk or baby teeth by the age of three and start losing them by the age of five or six. They tend to fall out in the same order they came, with the front centre lower teeth going first.
It takes six or more years to grow a full set of 28 adult teeth - 32 if you include wisdom teeth which arrive right at the back of the mouth around the age of 20.
Average Payments from the Tooth Fairy across the UK
1. London - £2.50
2. Bristol - £1.90
3. Aberdeen - £1.87
4. Birmingham - £1.75
5. Cardiff - £1.72
6. Leeds - £1.60
7. Manchester - £1.55
8. Belfast - £1.42
9. Edinburgh - £1.34
10. Coventry - £1.32
11. Leicester - £1.29
12. Nottingham - £1.26
13. Plymouth - £1.22
14. Sheffield - £1.20
15. Liverpool - £1.15
16. Sunderland - £1.12
17. Glasgow - £1.10
18. Bradford - £1.07
19. Wakefield - £1.05
20. Newcastle - £1
What do children buy with their Tooth Fairy money?
1. Sweets - 36 per cent
2. Toys - 31 per cent
3. They save it - 21 per cent
4. Books - 7 per cent
5. Clothes - 5 per cent
Most popular payments from the Tooth Fairy
1. £1 - 27 per cent
2. £2 - 25 per cent
3. Less than £1 - most typically 50p - 14 per cent
4. £5 - 12 per cent
5. £10 - 9 per cent
6. Nothing - 8 per cent
7. Between £10-£20 - 3 per cent
8. More than £20 - 2 per cent