Cost of raising a child tops £200,000
Tuesday, 23 February 2010 12:39
By myfinances.co.uk staff
The cost of raising a child has increased by nearly half in the last seven years, new research has revealed.
Insurance and Investment group LV=, which has been monitoring the cost of raising a family annually since 2003 says family budgets are being squeezed like never before forcing three in four parents to cut back on spending as a result of the recession. It says the cost of raising a child from birth until their 21st birthday is now more than £200,000, or £9,610 a year, up 43% since 2003.
Childcare and education remain the biggest costs with parents paying out £54,696 and £52,881 respectively over their child's lifetime. Childcare and education have both increased by around £20,000 since 2003.
Three quarters of parents surveyed (77%) said they have had to cut back on family expenditure as a result of the recession. But this is less than last year's 81% of parents suggesting returning confidence about the state of the economy
Holidays and fun days out have been hardest hit in the last twelve months with 49% parents saying they've had to forego spending in these areas. The 'make do and mend' mentality is beginning to show itself too, with 49% saying they've reduced their spending on clothes.
LV= says parents are still keen to make their budgets stretch as far as possible, with 70% opting for lower cost items and supermarket 'value' goods, But this was less than last year when 79% of parents said they were making such cut backs. A third of parents (31%) are buying second hand items to help make ends meet, with 37% selling unwanted items through eBay, other online sites, their local newspaper, or car boot sales, to raise money.
The need to make the family finances go further has also taken its toll on the amount parents are likely to save for the future. Just over one in three (35%). said they've had to reduce the amount they save on a regular basis. A further 19% have had to cancel or review their insurance products and income protection cover to help with family budgeting. But again this was down from 23% who said the same at the start of 2009.
Mike Rogers, LV= group chief executive, said: "For the first time since this report began, the cost of raising just one child has topped £200,000. Every parent will know how expensive it can be to raise a little one, and as parents, we know we don't begrudge a single penny of it. But I suspect many new and prospective mums and dads will be a little shocked to see the potential financial burden ahead of them."
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