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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