15th October 2014
The typical UK couple will shell out nearly £1m on general lifetime events such as buying a home, getting married, having children and retiring new research from Lloyds has claimed.
According to its report the average couple will spend some £877,000 on these key milestones.
But the cost varies tremendously across the UK, with Londoners unsurprisingly facing the highest bill, which comes in at an average close to £1.2m compared to a leaner £702,000 in the North East.
The report calculated the total costs for these life events by reviewing a handful of important ‘life goals’ separately. Included in the total costs were:
How do UK couples fund their big life commitments?
He study found that the average married couple has to borrow exactly 50% of the total money used to fund their own share of wedding costs while just 9% had to borrow all of the money. Some 43% however managed to fund their big day entirely from savings. The typical first time parent has to borrow only 9% of first-year baby costs, while almost three-quarters manage to avoid ‘baby-borrowing’ altogether. When it comes to purchasing a house, very few people are lucky enough to be able to avoid borrowing. Recent Council of Mortgage Lenders data suggests that the average first-time-buyer puts down a 20% deposit.
Serious saving and its impact
Philip Robinson, savings director at Lloyds Bank, commented: “The average cost of meeting our lifetime goals is almost a million pounds, which is a daunting figure for anyone. However, the report clearly shows that by getting into the saving habit early you can significantly improve your financial health later in life”
The study shows that those who start saving early in life are 50% to 57% more likely to gain ownership of property and investments in their 40s and 50s. For example, among those aged 45-64, who started saving seriously before age 25, 55% now own their home outright, whereas among those who only started saving seriously at age 34 or later, only 35% owned their home outright. The theme continues with non-cash investments, such as shares. Some 60% who started saving seriously before age 25 owned non-cash investments, compared to just 40% of those who did not start saving until 34 or later.