Annual Cost of a Child Survey (2007)
REVEALED: THE £186,000 COST OF RAISING A CHILD
- Cost up 33% over last five years and set to rocket 42% by 2012
- Childcare costs alone hit £50,000 for each child
- Central London remains the most expensive place to raise a child
- It would cost £140 billion to raise all UK children born in 2006
- Parents cutting back pocket money
The annual Cost of a Child survey from insurance and investment group LV= (formerly Liverpool Victoria), now in its fifth year, shows that parents could spend £186,032 on raising a child from birth to the age of 21. This is equivalent to £8,859 a year, £738 a month or £24.30 a day.
The survey by the UK's largest friendly society [1] shows that the cost of raising a child has increased by 33% over the five years since the survey began in 2003. Childcare and education remain the biggest expenditures, costing parents £50,538 and £47,310.
Cost of a child could rise to over £265,500 by 2012
Looking into the future LV= has predicted that by 2012 the cost of raising a child in the UK could reach £265,577 [2], equivalent to more than £12,500 each year. This means that over the ten years since the study began in 2003, the cost of raising a child in the UK would have almost doubled, increasing by a staggering 90% [3].
Nigel Snell, Communications Director at LV= comments: "The projection figures are quite staggering and it's unrealistic to expect people's income levels will increase in line with this rising level of expenditure. This means parents will need to be switched on about their family finances more than ever, even though they have always known that raising a child is costly. With UK debt figures rising we would recommend starting financial planning as early as possible to help meet the various costs associated with raising a child."
Where the expenditure goes
The £186,032 total cost of raising a child in the UK is spent in the following principal
Expenditure | Cost |
|---|---|
Childcare | £50,538 |
Education | £47,310 |
Food | £16,386 |
Holidays | £13,359 |
Clothing | £12,650 |
Hobbies & Toys | £ 9,822 |
Babysitting | £9,523 |
Leisure and Recreation | £7,062 |
Pocket money | £5,469 |
Furniture | £2,253 |
Personal | £988 |
Other | £10,673 |
Total | £186,032 |
£140bn cost of raising all children in the UK
The cost of raising all the children born in the UK in 2006 could be a massive £140bn [4], not including the impact of any future inflation.
Cost of childcare
Childcare from six months until the age of 14 could cost as much as £50,538 for a typical working parent household in the UK. This breaks down into nursery fees of £34,320 from six months to school age, £12,654 for 'after school clubs' and £3,564 for holiday clubs. This is equivalent to £312 each month from six months to age 14 for just one child, which is a significant financial commitment for any household.
2012 projection in line with house price forecasts
The projected increase of 43% in the cost of a child from 2007 to 2012, from £186,032 to £265,577, is in line with house price forecasts in England. The average cost of a home is expected to rise by 42% between 2007 and 2012, according to housing market forecasts commissioned by the National Housing Federation [5].
Cost of education
The average household could spend £47,310 on a child's education which includes a bill of £32,667 [6] for a three year university degree course. The cost of attending university includes annual tuition fees, travel, books, and living costs, including rent, bills and household items.
Parents choosing to put their child through private school can expect to pay an additional £72,957 for a day pupil, and a further £130,557 if the child boards [7]. 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 £120,267. The total cost from birth to 21 years for a child attending private school as a day pupil, and then going on to university, is more than a quarter of a million pounds at £258,989.
Food, clothes, toys & pocket money
From birth to age 21, the LV= Cost of a Child survey shows that the average UK household could spend £16,386 on a child's food, £13,359 on holidays, £12,649 on clothing, and £9,822 on hobbies and toys.
In addition, if parents were to splash out on this year's top 12 most popular toys for Christmas for their children, the bill would come to over £406 for the girls' list, and £416 for the boys' toys. The favourites for Christmas 2007 are the Sylvanian Families Grand Hotel and the Transformer Optimus Prime [8].
Parents becoming less generous?
Across the UK children receive £5,469 in pocket money between the ages of 5 and 18 years, which is equivalent to £420 each year. However, this is almost £50 less than the 2006 amount which parents were handing out to their children (£5,518).
Annual breakdown – university years are most expensive
The university years remain the most expensive, with an average annual cost of £12,249. The next most expensive period in a child's upbringing is between the ages of two and five (£12,129 per year) and new parents can expect to pay as much as £8,184 in the first year of a child's life alone. The breakdown of parental spending by years during a child's life is as follows:
- 1st year - £8,184
- Years 2 to 5 - £48,517 (£12,129 p.a. for these years)
- Years 6 to 11 - £48,595 (£8,099 p.a.)
- Years 12 to 18 - £43,992 (£6,285 p.a.)
- Years 19 to 21 - £36,746 (£12,249 p.a.)
Regional variations – Central London is most expensive
Regionally across the UK, the research shows that parents in Central London spend the most on raising a child (£199,869), followed by Outer London (£199,578), and the South East (£195,396). Wales is the cheapest place to raise a child (£179,317), followed by the East Midlands (£180,298) and East England (£182,355).
Nigel Snell, Communications Director at LV= comments: "As a parent of three, I know from experience that sacrifices have to be made in the early years, and many parents will have had to put some plans on hold to manage the costs associated with raising a family. Of course, every parent will tell you that it is all worth it, but making even small provisions and doing a little extra planning now could help new parents see their way more easily through the next 21 years."
Putting some money by regularly is one way of helping with the costs of bringing up children
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You can read more about savings and investments products offered by LV= here
Notes
- Association of Friendly Societies Year Book 2006-2007, Total Net Assets
- The projection has been calculated by taking the average percentage change over the last 4 years for each individual component and using it to forecast the cost, using compound interest, to 2012.
- The Cost of a Child in 2003 was £140,398; the 2007 Cost of a Child figure is £186,032.
- In 2006 there were 748,521 children born in the UK (ONS, 2006). This number multiplied by £186,032 comes to £139.2bn.
- Home Truths, National Housing Federation 2007
- Based on NUS (2005/2006) estimates on expenditure for course fees and living costs, with inflation applied where necessary.
- www.privateschools.co.uk/school_fees
- Top Twelve Toys for Christmas, Girls and Boys (Toy Retailers Association, 2007), using prices from Toys R Us and Amazon. Prices correct as at 28.11.2007.
