The cost of raising a child has rocketed to £210,000 according to research from the insurer LV=.
The amount parents spend on their offspring to the age of 21 has risen by 4.5% over the past year, ahead of the current rate of inflation which currently stands at 4%. The figure is up by 50% or £70,450 since 2003 when LV= first carried out the report.
Over the course of a year, the figure breaks down to £10,040 annually, £836 a month or £27.50 a day.
Childcare and education costs remain parents’ biggest area of expenditure costing £67,430 and £55,660 respectively over an offspring’s childhood. LV= do not include the cost of private education in the annual study but do cover school uniforms, after-school clubs and university tuition fees. Costs in this area have risen by 5.3% over the last year and are likely to increase considerably in 2012 when universities will be allowed to increase fees.
Despite the increase in tuition fees, 35% of parents remained hopeful that their children will go on to university but admitted that they would have to make cutbacks to meet the cost involved.
LV= spokesperson Mark Jones said: “Parents are all too aware that having a child comes with a hefty bill when you factor in things like childcare, schooling and holidays over a 21-year stretch.
“Childcare and education must feel like another mortgage payment for some parents, as this is still the biggest outlay and shows no signs of slowing down, particularly when many universities are set to increase tuition fees, up to £9,000 a year, from 2012. Despite this, I don’t think any parent would begrudge any spending on their children.”
Parental spending throughout a child’s first 21 years breaks down as follows:
1st year: £9,491
Years 1 to 4: £53,586 (£13,397 a year)
Years 5 to 10: £56,856 (£9,476 a year)
Years 11 to 17: £47,820 (£6,831 a year)
Years 18 to 21: £43,094 (£14,365 a year)
Total: £210,849
The average child will consume £18,581 worth of food up to the age of 21 and will cost its parents around £10,000 in hobbies and toys. Pocket money comes in at £4,543 while personal care and grooming accounts for £1,164 of the total amount spent to adulthood.
Some 78% of parents said they are actively making cutbacks to cope with financial pressures, according to the Cost of a Child Report. Financial worries have caused 39% of parents to cut back their savings and 30% to cancel or review their insurance products.
“We have all considered short-term measures to stretch the family budget and try to save money. But with 14% of parents saying they have made cuts specifically to their life, health, or unemployment cover, people could be leaving themselves and their families at risk,” said Mr Jones.
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Wed, 23 Feb 2011
Thu, 24 Feb 2011
The number of homes repossessed by lenders in the UK dropped by 24% to 36,300 last year, according to the Council of Mortgage Lenders (CML).
People aged over 50 have been hit hard by the economic downturn according to a report commissioned by Saga, the consumer group for the older people.
House prices could fall by up to 20% over the next two years as rising unemployment and spending cuts stifle demand, according to analysts.
Two out of every five consumers are dissatisfied or indifferent towards their current bank, according to a study by the “ethical and sustainable” Triodos Bank.
The controversial hike in university tuition fees has resulted in parents putting more money aside for their children’s education, according to new research.
The Office of Fair Trading (OFT) has taken action against a company for making misleading claims in its advertising that suggested it was a debt charity.
Nearly 20% of Britons have no savings whatsoever according to a study carried out by the market research consultancy Mintel.
Britons looking to escape the pressure brought on by tough economic times are increasingly turning to gambling, according to report by the UK Gambling Commission.
Four out of ten Britons expect their financial situation to worsen and nearly half are worried about the amount of debt they have, according to a study by the insolvency trade body R3.
The Office of Fair Trading (OFT) has ordered online cash for gold companies to improve the way they treat their companies.
Welfare cuts to be made over the coming years will leave low-paid families thousands of pounds worse-off despite the coalition government’s claim that there will be “no losers” from its austerity measures.
UK Inflation rose to its highest level in two years in January putting more pressure on the Bank of England to raise interest rates.
The consumer group Which? is poised to make a “super complaint” to the Office of Fair Trading (OFT) about “excessive” debit and credit card charges customers are forced to pay when buying flights, cinema tickets and other goods and services.
First-time buyers need to save more than the national average annual wage to be able to get a foot on the housing ladder, the Council of Mortgage Lenders (CML) has said.
The cost of renting a home in England and Wales fell in January, according to a survey from LSL Property Services.
Low-income families and working women are being priced out of nurseries and forced out of their jobs as childcare costs rise twice as fast as wages.
Young Britons are being priced out of marriage, home-ownership and parenthood according to study by First Direct.
The UK mortgage market started the year in rocky fashion with lending down by 13% in January from December.
The Nationwide has warned homeowners to be cautious of mortgage broker’s advice to sign up to a fixed-rate deal.
Thames Water has warned nearly 15,000 people who have been using water without paying for it that they could face six years worth of back charges if they do not come forward before 3 March.
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