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Catch up with the latest press releases from LV=

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Cost of raising a child climbs up

Press release: 24/02/2011

  • Cost of a child up 4.5% over the last year, ahead of official inflation rate of 4%
  • Over three-quarters (78%) of parents are feeling the pinch and making cutbacks due to financial pressures
  • A third (30%) of parents feel they will have to make cut-backs as a direct result of losing future Child Benefit payments
  • Rising university tuition fees in 2012 will add further pressure on parents

The cost of raising a child until their 21st birthday now totals more than £210,000, according to the annual Cost of a Child Report[1] from insurance, investment and retirement group LV=. This equates to £10,040 a year, £836 a month or £27.50 a day. Today's cost of raising a child is up 50% from LV='s first Cost of a Child Report in 2003[2].

The Report shows that the cost has increased by 4.5% in the last year, ahead of the official headline rate of inflation (CPI) at 4%[3] with childcare and education remaining the biggest expenditure, costing parents a mammoth £67,430 and £55,660 respectively over their offspring's childhood. The cost of education, which includes school uniforms, after-school clubs and university tuition fees (excludes any private school fees) has grown by 5.3% over the last year. Other areas of expenditure that have seen big increases in 2010 include clothing (up 11.7%), holidays (up 6.4%), food (up 5.9%) and personal care (which includes toiletries and bath equipment) (up 5.1%).

The expenditure in detail

The £210,848 potential cost of raising a child in the UK in 2010 is made up of the following expenditure:


Total cost in December 2010

Total cost in December 2009

Total cost in 2003 (1st year of the report)

Childcare & Babysitting




















Hobbies & toys




Leisure & recreation




Pocket money








Personal care




Other (includes driving lessons, first car, birthday and Christmas presents)








When do children cost the most?

The cost of raising a child rises the most during university years (age 18-21), when parents could face having to pay out £14,634 a year. New parents face outlaying £9,152 during the first twelve months of a child’s life and between the ages of one and four, a child costs an average of around £53,586 – that’s £13,396 a year.

The breakdown of parental spending by different years of a child’s life is as follows:

• 1st year - £9,491
• Years 1 to 4 - £53,586 (£13,397 a year for these years)
• Years 5 to 10 - £56,856 (£9,476 a year)
• Years 11 to 17 - £47,820 (£6,831 a year)
• Years 18 to 21 - £43,094 (£14,365 a year)

Mark Jones, LV= head of protection, said: "Parents are all too aware that having a child comes with a hefty bill when you factor in things like childcare, schooling and holidays over a 21 year stretch. Childcare and education must feel like another mortgage payment for some parents as this is still the biggest outlay and shows no signs of slowing down, particularly when many universities are set to increase tuition fees up to £9,000 a year from 2012. Despite this, I don’t think any parent would begrudge any spending on their children and savvy ways to reduce costs and protect income are all sensible measures to consider."

Education costs look set to takeover as biggest expenditure in 2012 onwards

The LV= Cost of a Child Report shows that although the cost of education has risen consistently by 5.3% in 2009 and again in 2010, parents cannot feel too complacent as university tuition fees look set to increase up to £9,000 a year from September 2012.

The report has found that a third (35%) of parents are hopeful that their child will still go to university despite the increase in fees, and they expect to make cut-backs to be able to help their child with the cost, while a further fifth (19%) are hopeful that their child will still go to university although they cannot afford to help with the cost. A further 7% of parents are hoping their child could go to university on a scholarship, and sadly, nearly one in ten (8%) now doubt that their child will go to university at all as they wont be able to afford it.

Family finances feel the pinch: Child Benefit reforms will be felt across the country

Over three-quarters of parents say that the economic climate is really hitting them hard with 78% having made cutbacks or economised in the last year because of financial pressures. Holidays and short breaks are where the biggest cuts have been made this year (48% of parents). The cost of taking a child on holidays from birth to 21 rose 6% in 2010 to just over £14,000. Cut-backs on clothing and leisure activities have also been made, with 46% and 44% of parents cutting back on these respectively.

In light of the Coalition Government’s announcement to abolish Child Benefit for households with a higher-rate taxpayer, only four out of ten (37%) parents felt that they would be unaffected (and a further 15% "didn’t know"). Nearly a third of parents (30%) feel they will have to cut-back their spending as a direct result of losing Child Benefit which can be up to £66 a month for the eldest child[4].

'Bargain hunters' on the increase

Popular car boot and bargain hunting programmes seem to have inspired money saving savvy parents by looking at other avenues to save cash. Nearly three-quarters (70%) have been actively shopping for lower cost items and ‘value’ goods in a bid to cut back. Nearly half (42%) are selling unwanted items on eBay and at car boot sales, and 41% are bargain hunting in second hand shops, an increase from the 31% of parents bargain hunting in last year’s report.

Savings and protection at risk Financial pressures are heavily impacting savings priorities this year. Over a third (39%) of parents have cut-back on their savings because of financial pressures (44% of Londoners and 46% of those from Yorkshire and Humberside). In addition, 30% have cancelled or reviewed their insurance products, increasing from 19% in last year's Cost of a Child report.

Mark Jones continues: "We have all considered short term measures to stretch the family budget and try to save money. Yet it's important to keep the bigger picture in mind and understand the impact that cancelling insurance policies and cutting back on savings would have on your family if you or your partner were suddenly unable to work due to accident, illness or unexpected job loss. With 14% of parents saying they have made cuts specifically to their life, health, or unemployment cover people could be leaving themselves and their families at risk."

Mark Jones, LV= Head of Protection and Nifa McLaughlin, editor of parenting website, will discuss the Cost of a Child Report and take questions on the implications for families around the UK on a live webcast (click here) at 1pm on Thursday 24th February. Mark Jones is also available for interview.

Notes to editors

[1] The cost of a child calculations, from birth to 21 years, have been sourced by the Centre of Economic and Business Research (CEBR) for LV= in January 2011 and are based on the cost for the 21 year period to December 2010. The report also includes omnibus research conducted for LV= by Opinium Research from 25-28 January 2011. The total sample size was 527 parents of children under the age of 18. Results have been weighted to a nationally representative criteria.
[2] The cost of raising a child in 2003 was £140,393; the 2007 Cost of a Child figure was £186,032
[3] Source:
[4] Source:

About LV=

LV= is a registered trademark of Liverpool Victoria Friendly Society Limited (LVFS) and a trading style of the Liverpool Victoria group of companies.

LV= employs around 4,000 people, serves over four million customers and members, and manages around £7.9bn (as at 30 September 2010) on their behalf, via LV= Asset Management (LVAM). We are also the UK's largest friendly society and a leading mutual financial services provider.

LVFS is authorised and regulated by the Financial Services Authority, register number 110035. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.