Cost of raising a child at an all-time high
Having children has never been more expensive, with the cost of bringing up a child until he or she is 21 at an all-time high of £222,458.
This is more than £4,000 up on last year and £82,000, a 58 per cent increase, more than ten years ago, when the first annual Cost of a Child Report from protection specialist LV= was published.
Education and childcare remains the biggest expenditure for parents. The cost of education (including uniforms, after school clubs and university costs) has shot up a huge 124 per cent from £32,593 to £72,832 per child in the last ten years. childcare costs have also rocketed from £39,613 in 2003 to £63,738 today, another big increase, of 61 per cent.
From birth to 21, parents spend an average of £19,270 on food and £16,195 on holidays, which now cost four per cent more than last year. In fact, in the last decade, costs have risen in all areas of expenditure apart from clothing, which has seen a five per cent drop.
The cost of raising a child won’t always be the first thing parent’s think about when deciding to have a family, and regardless of the cost...
The increase in money spent on raising a child now is beginning to effect families. Mums and dads all over Britain are tightening their purse strings, with just over three quarters of parents forced to make cutbacks to make ends meet.
While many are reining in spending on luxuries such as holidays, just over a quarter are also cutting back how much they spend on essentials such as food. Of those parents who are cutting back, 68 per cent have switched to buying cheaper or value goods.
Vouchers and discount codes are also popular, with 56 per cent of these parents using them to save on shopping bills. Many are also trying to boost their income, with two fifths of parents selling personal items online or at car boot sales.
Mark Jones, Head of Protection at LV=, said: “The cost of raising a child continues to soar and is now at a ten year high. Everyone wants the best for their children, but the rising cost of living is pushing parent’s finances to the limit.
“There seems to be no sign of this trend reversing. If the costs associated with bringing up children continue to rise at the same pace, parents could face a bill of over £350,000 in ten year’s time.”
Over the last ten years, London (£239,123), the South East (£237,233) and the East of England (£233,363) have remained the three most expensive places to raise children.
Ten years ago this was closely followed by Wales, whereas now it is Northern Ireland (£232,883).
Families in the South West have seen the biggest hike in costs, now paying £100,077 more per child than they were ten years ago.
Forget dolls and train sets. Today’s children want the same toys as their parents, and the popularity of smartphones, tablets and laptops is adding to the expense of raising a child.
Parents feel under pressure to keep up with the latest technological advances – even for children as young as three years old.
Almost a third of parents have bought their child an electronic gadget in the last 12 months, with 16 per cent forking out for a laptop or iPad/tablet. The average yearly amount parents spend on these gadgets for their child is £302.
Many cash-strapped families are responding to financial pressures by saving less and spending less. Two-fifths of parents have slashed the amount they are stashing in savings accounts and a further 26 per cent of those who are cutting back (up from 22 per cent last year) have cancelled or reviewed insurance policies to try to save money.
Almost half of parents have no life cover, income protection or critical illness cover in place. While 36 per cent of parents do have life cover, only 11 per cent have critical illness cover and a meagre six per cent have income protection.
Mark continued: “The cost of raising a child won’t always be the first thing parent’s think about when deciding to have a family, and regardless of the cost, people wouldn’t change having children for the world.
“We know parents are making cutbacks to make their money go further. However, I would urge families considering cancelling insurance such as life cover or income protection as a way to save money to think long term. This can have catastrophic implications on the family’s finances if either parent becomes unable to work or is no longer around.
“The cost of raising a child has increased rapidly over the last decade, and looks set to continue rising. It is imperative parents make sure they financially protect themselves and their family, and seek professional advice to talk about what best suits their needs.
"Protection insurance often costs less than people think, and whether to take out cover is one of the most important financial decisions people will ever make,” Mark said
For further information about LV= and for an in-depth look at how much it costs to raise a child today, please go to www.LV.com
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