Originally a small allowance given to a woman in order to purchase clothes etc. for herself. More recently it is used to describe any small amount of money which might be earned by children or the low-paid for some service.
The early usage is alluded to in the 16th century in The Testamenta Eboracensia - A Selection of Wills from the Registry at York, 1542:
"I give my said doughter Margarett my lease of the parsonadge of Kirkdall Churche.. to by her pynnes withal."
The first explicit mention of 'pin money' is in J. Keble's English Republic:
On difference between him and his lady about settlement of 200 l. per annum, pin-mony in case of separation,