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Cost of raising a child nears £200,000
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While soaring costs will ensure having a child is one of the most life-changing of events, sound financial planning can help you cope with the new demands on your lifestyle. Find out how
The average cost of raising a child from birth to the age of 21 in the UK is £193,772, according to the annual Cost of a Child survey from insurance and investment group LV=.
This is equivalent to £9,227 a year, or £769 a month.
The survey shows the cost of raising a child has increased by 4% in the past year and is up 38% over the five years since the survey began in 2003.
Childcare and education remain the biggest expenditures, costing parents £53,818 and £50,240 respectively.
“Every parent knows how their hard-earned savings can dip thanks to eye-watering education and childcare costs,” says Mike Rogers, LV= group chief executive.
“It’s also likely to be of little comfort to mums and dads to hear that pocket money costs are at their lowest level since 2004, or that expenditure on family holidays in 2008 was only 4% up on the 2003 cost.”
Out of pocket
Across the UK children receive £4,144 in pocket money between the ages of 5 and 18 years, which is equivalent to £319 each year, according to the Halifax Pocket Money survey.
However, this is £1,325 less than the total in December 2007 of £5,469, and £1,374 less than the 2006 amount.
More than eight out of 10 parents have cut back on family expenditure as a result of feeling the pressure financially in the economic downturn.
Family activities are the main casualty, with just over half of parents admitting to curbing their spending on holidays and short breaks, as well as reducing spend on leisure and recreational activities.
Regionally across the UK, the research by LV= shows parents in outer London spend the most on raising a child at £211,977, followed by inner London with £202,644, and eastern England £200,274.
Parents in the West Midlands face the lowest costs at £186,641, while in Wales the estimated average is £188,916 and in Scotland it is £189,086.
“Our research shows parents are being very resourceful when it comes to budgeting and cutting back on non-essential spend,” Rogers says.
“Planning ahead is more important than ever though, and saving as much as you can, just a little and often, could help to ease the financial pain."
by Martin Pegan and Tom Murphy, 26 January 2009
