23rd January 2014
The cost of bringing up a child has reached £227,266, up from £222,458 last year, with the first year of a child’s life seeing the largest increase.
According to the annual ‘Cost of a Child’ report from protection insurance specialist LV=, the cost of a child’s first year has risen by 50% (£11,025 up from £7,372) since the first report in 2003. In the past 12 months it has increased by 5%, largely due to the cost of childcare for children aged less than a yearrising by 7% (£,6,623 up from £6,191 in 2013). In total, parents now spend £66,113 on childcare – an increase of 4% overall.
Education and childcare remain the biggest costs and 71% of parents report that they have been forced to make cuts to meet the financial demands of raising their family. The overall cost of raising a child has increased by 62% since 2003.
The full facts: cost of raising a child 2003 – 2014
|CATEGORY||THIS YEAR: 2014||% DIFFERENCE FROM 2013||% DIFFERENCE FROM 2003|
|Childcare & Baby sitting||£66,113||3.7%||66.9%%|
|Hobbies & Toys||£9,433||1.3%||6.5%|
|Leisure and Recreation||£7,419||0.9%||16.5%|
*Does not include private school fees but does include day to day costs associated with going to school (e.g. school trips, text books, uniform and school lunch) and university fees.
Single parents hardest hit
Parents have been hit hard by increases in the cost of living as more of their income is spent on essential goods and services such as rent, household bills and food, items that have seen particularly rapid inflation over the past few years. The overall cost of goods and services purchased by parents has increased by 33.6% in 10 years, compared with 30.7% for the headline consumer price index meaning that prices have been rising almost ten per cent faster for parents than the general inflation rate says LV=. Single parents families have been hit even harder with the overall cost of goods increasing by 34.7% over the same period comng at a time when many benefits have been put on hold and wages have not kept up wth inflation.
The increasing cost of raising a child means that parents are now estimated to be spending on average more than a quarter (28%) of their annual income on bringing up their child each year – up from 23% in 2004. For single parent families this figure rises to more than half (54%) of their annual income.
The real impact of Child Benefit cuts
Alongside the rising cost of raising a family, the changes to Child Benefit in January 2013 – which saw many families lose some or all of their child benefit – have affected many households. One in four (27%) mums have returned to work earlier than they wanted to and close to one in five (19%) have had to work more hours than they intended to. While one in ten (11%) parents have now chosen to have a smaller family and one in five (21%) are delaying having an additional child because they now can’t afford it.
However, with the cost of average childcare costing £405 a month across Britain, mums now say they personally need to earn an average of over £26,000 a year to make it worthwhile returning to work.
Mark Jones, head of protection at LV= said: “Having children has never been more expensive. The costs associated with raising a family are set to remain a pressure point for families across the UK but seeing the cost of raising a child in its entirety can help people think about how to secure their family’s financial future should anything unexpected happen. We would also urge parents to think again before cutting back on insurance such as life cover or income protection. If either parent becomes unable to work or is no longer around then this type of insurance can protect you financially at a time when you most need it.”
Across the UK, London (£244,977), the South East (£243,177) and Northern Ireland (£237,959) are the three most expensive places to raise a family.
|East of England||£236,879||£233,363|
|Yorkshire & Humber||£216,846||£213,123|