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Parents drop savings for increased child costs
The cost of raising a child has increased by 3.3 per cent since last year, prompting families to reduce their savings, figures from LV= have revealed.
A four-page Cost of a Child Report showed the cost of raising a child from birth to their 21st birthday now totals £218,024, equating to £10,382 a year, £865 a month or £28.44 a day.
|
Expenditure from birth to age 21 |
Total cost |
% difference from last year |
% difference from 2003 - first year of the report |
|---|---|---|---|
|
Education* |
£71,780 |
5.1% |
120% |
|
Childcare and babysitting |
£62,099 |
2.7% |
57% |
|
Food |
£18,667 |
4.0% |
25% |
|
Clothing |
£10,781 |
3.7% |
-5% |
|
Holidays |
£15,532 |
1.6% |
36% |
|
Hobbies & Toys |
£9,248 |
-4.6% |
4% |
|
Leisure and Recreation |
£7,303 |
-0.6% |
15% |
|
Pocket Money |
£4,337 |
4.8% |
28% |
|
Furniture |
£3,373 |
2.5% |
62% |
|
Personal care |
£1,143 |
2.6% |
24% |
|
Other (includes driving lessons, first car, birthday and Christmas presents) |
£13,761 |
4.8% |
56% |
|
TOTAL |
£218,024 |
3.3% |
55% |
Mark Jones, head of protection for LV=, said 43 per cent of parents have cut back on saving and reduced the amount they are putting away, while a further 22 per cent have cancelled or reviewed their insurance policies to try and save money.
Half of parents said they do not have any life cover or income protection in place. A third said they do have life cover, while 11 per cent said they have both life cover and income protection.
He said: “When considering ways to ease the family budget it is important that we keep in mind the long-term picture. Cancelling life cover or income protection, for instance, as a short-term measure to save money can have catastrophic implications if either parent were unable to work or weren’t around in the future.
“Despite an uncertain UK economy forcing more pressure on the family budget, it’s clear that parents don’t begrudge the money they spend on their children, and would rather do without themselves than radically cut back on what they can provide for their children.
“From studying parent’s spending habits we have seen the cost of raising a child steadily increase since our first report in 2003, and this trend shows no sign of stopping.”
