New Mums Underestimate The Cost of Raising a Child
- First time mums estimate a cost of £5,400 per year to raise a child
- The average cost per year currently stands at £8,580
- The day-to-day costs of raising a child is up 15 per cent from 2011
The average cost of raising a child is currently £8,580, which is £3,180 or 59 per cent more than what new mums expected on average.
According to new figures from Legal & General Retail Protection, the provider of life insurance, critical illness cover and income protection, the total cost of raising a child to the age of 18 is now £154,440, which is a 15 per cent increase from 2011 and three times higher than the amount when the same research was carried out in 2001.
In these uncertain times, it is important that new parents consider how best they can protect the financial future of their families.
Food is the biggest cost, accounting for 43 per cent of weekly spend alongside expenses ranging from childcare and pocket money, to transport and school fees.
Bonnie Burns, Product Director for Legal & General’s Retail Protection business, said: “We all know there are financial pressures involved in raising a family. Current levels of inflation and the weak state of the economy mean that the cost of bringing up a child is rising quickly – threefold in the past 10 years.
“Our report shows that new mums are massively underestimating how much it could cost to raise a child.
“It’s vital that new parents are fully aware of the potential costs so they can undertake financial planning and provide their families with the best possible living standards for their means.”
The figures in Legal & General’s Value of a Parent report are the result of a survey of expectant mums and mums with a child under a year old.
The report also revealed that 73 per cent of parents said their top financial priority was to ensure their children are looked after if they were unable due to death or illness.
But despite this most parents are spending, on average, over three times the amount on treats and pocket money (£18 a week) than they are on insurance (£5.50 a week).
Bonnie added: “With that in mind, it’s worrying to see that the average family is spending proportionately very little on insurance to protect their children from financial difficulties.
“In fact, our analysis shows that the average parent spends over three times more money on treats and pocket money than on insurance.
“Protection cover may not be the top financial priority when it comes to raising a child but without it, you could find yourself unable to afford all the other costs if you or your partner were unable to work due to long term sickness, injury or a critical illness.
"In these uncertain times, it is important that new parents consider how best they can protect the financial future of their families.”