Public Servant Lifestyle

Liverpool Victoria’s annual Cost of a Child survey - now in its fourth year - shows that parents could spend £180,137 on raising a child from birth to the age of 21. This is equivalent to £8,578 a year, £715 a month or £23.50 a day.

The survey shows that the cost of raising a child has increased by 28% since the survey began in 2003. Childcare and education are the biggest expenditures, costing parents £49,092 and £46,778, and having increased by 7% and 26% respectively since 2005 alone.

The cost of raising all the children born in the UK in 2005 could be a massive £130bn4, not including the impact of any future inflation.

Working Hard

According to the research, in almost two-thirds (61%) of UK families, both parents now have to work to cover the costs of raising a child. This is clearly a worry for parents, with nearly half (48%) admitting that they are concerned about the amount of time they are spending away from their children5.

And with both parents working, other family members are called upon to help. The survey reveals that half of parents (50%) who work still have to rely on grandparents or other family members to help with childcare, for example doing the school run, looking after children when they are ill, and after school care. In addition, 12% of parents who both work depend on regular financial support from other family members to help with bringing up their children.

Parents Making Sacrifices

The financial pressure of bringing up children is a clear concern for parents, with sacrifices being made in order to manage the costs associated with raising a family. Over two thirds of parents (68%) have had to put savings and financial planning on hold, and six out of ten parents have had to change, cancel or postpone holidays (61%) and social plans (60%).

Overall, the research shows that eight out of ten (83%) parents have had to put some plans on hold because of the costs of raising children.

In summary the findings indicate that:

The cost of raising a child is increasing faster than property prices

28% increase in cost of raising a child in four years

It would cost £130bn to raise all UK children born in 2005

61% of parents both have to work to cover the costs of raising their children

Education costs have risen 26% - to £47,000 per child - since 2005

Inner London remains the most expensive place to raise a child

The cost of raising a child in the UK is also rising at a faster rate than property prices. The price of the average house has risen by 8% within the last year (to £181,1862), whilst the cost of raising a child is up 9% on last year’s survey. This increase is also almost four times the rate of inflation

The following activities or life events have been affected:

Financial planning/saving - 68% of parents have had to put on hold
Holidays - 61%
Socialising - 60%
Leisure activities - 51%
Career changes - 42%

Education Costs

The average household could spend £46,778 on a child’s education, up by a quarter (26%) since 2005, due to the increase in university tuition fees introduced this year. The cost of attending university now stands at £324,786 - which includes tuition fees, books etc…and living costs.

Parents choosing to put their child through private school can expect to pay an additional £71,050 for a day pupil, and a further £130,450 if the child boards. This means that for a child who attends private school as a day pupil and goes on to university, the cost of education alone could be as high as £117,828. The total cost from birth to 21 years for a child attending private school as a day pupil and university tops a quarter of a million pounds (£251,188).

From birth to age 21, the Cost of a Child survey shows that the average UK household will spend £16,002 on a child’s food, £12,352 on clothing, £11,086 on holidays, £9,592 on hobbies and toys, and £5,518 on pocket money.

Annual Breakdown

The university years remain the most expensive, with an average annual cost of £12,153. The next most expensive period in a child’s upbringing is between the ages of six and 11 (£9,468 per annum) and parents can expect to pay as much as £7,867 in the first year of a child’s life alone. The breakdown of parental spending by years during a child’s life is:

1st year - £7,867
Years 2 to 5 - £31,363 (£7,841 p.a. for these years)
Years 6 to 11 - £56,810 (£9,468 p.a.)
Years 12 to 18 - £47,639 (£6,806 p.a.)
Years 19 to 21 - £36,458 (£12,153 p.a.)

Where Expenditure Goes

The £180,137 total cost of raising a child in the UK is spent in the following principal categories:

Expenditure Cost

Childcare £49,092
Education £46,778
Food £16,002
Clothing £12,352
Holidays £11,086
Hobbies & Toys £9,592
Babysitting £9,232
Leisure & Recreation £6,896
Pocket money £5,518
Furniture £2,201
Other £11,388
Total £180,137

Regional Variations

Unsurprisingly the 'Inner London' area was found to be the most expensive place to be raising an infant. Across the UK, the research shows that parents in Inner London spend the most on raising a child (£193,562), followed by Outer London (£193,060), and the South East (£185,923). Wales is the cheapest place to raise a child (£172,632), followed by the East Midlands (£174,906) and the North East (£176,868).

Nigel Snell, Liverpool Victoria’s Communications Director, comments: “With the costs of raising a child in the UK having increased nine per cent over the past 12 months alone, parents need to be more switched on about their family finances than ever before.

"Raising a family requires careful financial planning and regular saving, as well as a great deal of hard work. The earlier would-be-parents start thinking about the costs associated with bringing up a child, the sooner they can start saving to meet the expense.”

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