information

We use cookies to give you the best possible experience online. By continuing to use our website, you agree to receiving our cookies on your web browser. Visit our cookie policy page to find out more and how to change your cookie settings.

skip to main content

Catch up with the latest press releases from LV=

Large green heart

Soaring child care fees sees cost of raising a child hit £229,251

Press release: 22/01/2015

  • Cost of raising a child has increased at almost twice the rate of annual inflation over the last 12 years

  • Parents now spend nearly a third (29%) of their gross annual household income on raising a child

  • Childcare represents largest annual rise over the last 12 months, costing parents £67,586 on average

The cost of raising a child in the UK from birth until the age of 21 has climbed to £229,251, an increase of 63% since 2003.

According to the annual ‘Cost of a Child’ report from protection specialist LV=, costs associated with raising children have increased at almost twice the rate of annual inflation over the last 12 years [1].

Parents are spending less on food, hobbies and toys for their children, but these savings are being eclipsed by huge increases in the cost of education and childcare. The report reveals that these two areas alone now account for 62% (£141,905) of all the costs involved in raising a child to the age of 21 [2].

Childcare (nurseries, babysitting and after-school care) is one of the biggest drains on family finances, at £67,586 on average. The cost of childcare varies across the UK with childcare costs in London (£81,276) 20% higher than the national average. The South East (£75,902) and the West Midlands (£74,598) follow, while parents in Yorkshire & Humberside pay the least for childcare over the course of their child’s life (£61,397). [See regional table.]

The bulk of this cost (£42,389) is incurred in the first four years of a child’s life [3]. Indeed parents with young children (aged under three) can expect to fork out a quarter (27%) of their household income to meet the cost of nursery fees [4].

Parents in the North East face paying 31% of their household income on nurseries for children under the age of three, while Wales and Yorkshire come a close second and third (both 30%). Although London has the highest nursery charges in the country, higher salaries means fees account for a smaller percentage (25%) of these families’ household income.

Education costs (school uniforms, books, stationary, trips, lunch and university fees) are the biggest expense for parents. Parents face an education bill for £74,319 on average for non-fee paying schools – a sum that has climbed 128% since LV= commissioned the first report in 2003, with parents with children at fee paying day schools paying an additional £129,030.

Rising costs aren’t just hitting parents’ pockets, but impacting on the size of families. Recent figures from ONS predict that by the year 2022, half of all UK families will have just one child. Echoing this, the Cost of a Child report reveals that one in 10 (9%) parents admit that they are postponing having any more children due to financial concerns [5].

Faced with soaring costs, four in ten parents (44%) have made reductions to their routine spending over the past year in order to make ends meet. Parents are making cuts on essential spending such as clothes (39%) and spending on leisure and recreational activities has also fallen by 27%.

Simultaneously, parents are adopting a more thrifty approach when it comes to shopping. Almost two thirds (63%) admit to buying lower cost items in the last year, while almost half (49%) regularly use vouchers and discount codes.

Recent cuts to Child Benefit mean that a family’s household earned income now needs to go further than before. Yet, despite this, just a third (31%) of households have thought about what they would do if they lost their income due to accident or illness. As just one in five (21%) parents have an insurance policy that would cover their income or provide them with a lump sum if they were unable to work for a prolonged period of time, many families could find themselves in financial difficulty if they suddenly lost their regular wage [6].

Myles Rix, Managing Director of Protection at LV= said , " Having children has never been more expensive and it is important that parents take steps to secure their families financial future. We urge parents to ensure that their family has a valuable safety net such as income protection in place. Costs such as childcare and education are continuing to rise and a significant part of a family’s income is spent on children. If the unexpected were to happen and either parent became unable to work, income protection insurance would provide a family with financial security when they need it most."

For further details, log on to www.lv.com .

The full facts: cost of raising a child 2003 – 2015

CATEGORY

THIS YEAR: 2015

LAST YEAR: 2014

FIRST REPORT: 2003

% DIFFERENCE FROM LAST YEAR

% DIFFERENCE FROM 2003

Childcare & Baby sitting

£67,586

£66,113

£39,613

2.2%

70.6%

Education

£74,319

£73,803

£32,593

0.7%

128%

Food

£19,517

£19,804

£14,918

-1.4%

30.8%

Clothing

£10,942

£10,935

£11,360

0.1%

-3.7%

Holidays

£16,675

£16,506

£11,458

1.0%

45.5%

Hobbies & Toys

£9,377

£9,433

£8,816

-0.6%

6.4%

Leisure and Recreation

£7,486

£7,419

£6,366

0.9%

17.6%

Pocket money

£4,603

£4,553

£3,386

1.1%

35.9%

Furniture

£3,434

£3,453

£2,074

-0.6%

65.6%

Personal

£1,146

£1,157

£925

0.9%

23.9%

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

£14,167

£14,091

£8,845

0.5%

60.2%

Total

£229,251

£227,266

£140,398

0.9%

63.3%

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.

Sending a child to private school would add, on average, £129,030 for a child attending day school, or £237,323 for a child boarding at school, to the overall cost of raising a child, according to CEBR.

Nursery costs by region – 2015

REGION

ANNUAL HOUSEHOLD INCOME

WEEKLY HOUSEHOLD INCOME

WEEKLY NURSERY BILL FOR CHILDREN UNDER THREE

% OF SALARY

North East

£29,848

£574

£179.13

31.21%

Wales

£32,136

£618

£190.94

30.90%

Yorkshire and the Humber

£32,968

£634

£190.21

30.00%

Scotland

£35,048

£674

£196.23

29.11%

East

£40,352

£776

£220.63

28.43%

West Midlands

£33,956

£653

£181.70

27.83%

South West

£38,012

£731

£200.89

27.48%

East Midlands

£34,164

£657

£178.57

27.18%

South East

£45,136

£868

£225.76

26.01%

Northern Ireland

£31,720

£610

£157.72

25.86%

North West

£34,112

£656

£168.75

25.72%

London

£46,696

£898

£226.15

25.18%

United Kingdom

£37,648

£724

£196.26

27.11%

The years of raising a child

AGE

COST: 2015

% INCREASE FROM 2014

First year

£11,224

1.8%

Years 1 to 4

£61,084

1.9%

Years 5 to 10

£48,474

0.5%

Years 11 to 17

£55,087

0.2%

Years 18 to 21

£53,383

0.5%

Total

£229,251

0.9%

Regional breakdown 2014-15

Across the UK, London (£249,763), the South East (£243,282) and Northern Ireland (£239,893) are the three most expensive places to raise a family.

REGION

2015

2014

London

£249,763

£244,977

South East

£243,282

£243,177

Northern Ireland

£239,893

£237,959

East of England

£238,858

£236,879

South West

£233,932

£233,555

West Midlands

£232,944

£231,402

England

£230,410

£227,827

Scotland

£230,285

£228,773

North West

£222,831

£218,992

East Midlands

£221,981

£223,388

North East

£215,852

£211,607

Wales

£214,162

£210,715

Yorkshire & Humber

£213,717

£216,846

UK National Average

£229,251

£227,266

You can view our full Cost of a Child report which has lots of stats and information on the current costs of raising a family.


Notes to editors:

Cost of a child calculations, from birth to 21 years, have been compiled by the Centre of Economic and Business Research (CEBR) for LV= in December 2014 and is based on the cost for the 21 year period to December 2014. Using data from the ONS’ Family Expenditure Survey, CEBR also were also able to compile a measure of inflation for families, in contrast with the overall CPI measure.

Additional research was conducted by Opinium Research from 16 to 23 December 2014. The total sample size was 2,003 UK adults and was conducted online. Results have been weighted to a nationally representative criteria.

To obtain statistics regarding nurseries (national and regional costs, as well as the percentage of parents’ salaries), an audit was carried out by obtaining weekly costs for 928 nurseries across the UK. These were then split up into region to produce average costs. This was then compared to average weekly household salaries.

About LV=

LV= employs 6000 people and serves over 5.5 million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations such as ASDA, Nationwide Building Society and UNISON.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. LVFS is a member of the ABI, the AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.


[1] The cost of raising a child has increased by 63.3% in the 12 years since 2003, which equates to an average 5.3% annual rise in costs. According to the Bank of England, the average rate of inflation since 2003 is 3.2%.

[2] According to CEBR, the average cost of a child is £229,251. The average childcare and babysitting costs £67,586 and educations costs £74,319 (combined this amounts to £141,905, or 62%).

[3] According to CEBR, the cost of childcare in the first four years of the child’s life amounts to £42,389. This is 62% of the overall lifetime cost of £67,586.

[4] These figures were obtained by taking the costs of nursery care across the country (from an audit of 928 nurseries), and dividing it by the average weekly UK household income (taken from CEBR). The average UK yearly income is £37,648, which is £724 per week. According to the audit, The average nursery cost is £196.26 nationwide. This is 27.11% of the family income.

[5] Data comes from ONS Families and Households report, 2013: http://www.ons.gov.uk/ons/rel/family-demography/families-and-households/2013/stb-families.html.

[6] According to Opinium Research, 39% of people said they had started saving less money than they normally do to meet the costs associated with looking after children.