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Catch up with the latest press releases from LV=

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LV= Cost of a Child

Press release: 23/02/2010

  • Cost of a child up 4 per cent since last survey, up 43 per cent over last seven years
  • Family budgets stretched as three in four parents forced to cut back on spending due to ongoing economic crisis
  • Whole family feels the pinch - one in eight parents say their children have asked for less pocket money

The annual survey from insurance and investment group LV= on the Cost of a Child, now in its seventh year, shows that, for the first time, parents are likely to have to have to shell out more than £201,000 on raising a child from birth to the age of 21*. This equates to £9,610 a year, £800 a month or £26 a day.

The survey by the UK's largest friendly society shows that the cost of raising a child has increased by 4 per cent since the last survey in January last year, and is up 43 per cent over the seven years since the survey began in 2003**. Childcare and education remain the biggest expenditures, costing parents a mammoth £54,696 and £52,881 respectively over their child's lifetime.

Mike Rogers, LV= Group Chief Executive, said: "For the first time since this report began, the cost of raising just one child has topped £200,000. Every parent will know how expensive it can be to raise a little one, and as parents, we know we don't begrudge a single penny of it. But I suspect many new and prospective mums and dads will be a little shocked to see the potential financial burden ahead of them."

The Expenditure in Detail.

The £201,809 total cost of raising a child in the UK is made up of the following expenditures:


Dec 2009 costs

Jan 2009 costs

2003 costs (1st year of survey)

























Hobbies and Toys




Leisure and Recreation




Pocket Money












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








Cut backs still on the family agenda

77 per cent of parents say they have had to cut back on family expenditure as a result of the ongoing economic situation***. However, the data suggests that this 'tighten your belt' syndrome could be slightly on the wane, as last year's research showed that marginally more - 81 per cent - of parents said they were having to do the same then. Holidays and fun days out have been hardest hit, with 49 per cent of parents saying they've had to forego spending in these areas. The 'make do and mend' mentality is beginning to show itself too, with 49 per cent saying they've reduced their spending on clothes.

When it comes to cutting back, parents have remained largely consistent with where they'll attempt to make savings:

  • Savings – 36 per cent (down from 42 per cent last year)

  • Furniture & furnishings – 36 per cent (38 per cent last year)

  • Food - 32 per cent (35 per cent last year)

Stretching budgets?

The study shows that parents are still keen to make their budgets stretch as far as possible, with 70 per cent opting for lower cost items and supermarket 'value' goods, a drop from 79 per cent on the same research last year. A third of parents (31 per cent) are buying second hand items to help make ends meet, with 37 per cent selling unwanted items through eBay, other online sites, via their local newspaper, or car boot sales, to raise money.

Families could be leaving themselves financially exposed

The need to make the family finances go further has taken its toll on the amount parents are likely to save for the future. Just over one in three say they've had to reduce the amount they save on a regular basis (35 per cent). A further 19 per cent have had to cancel or review their insurance products and income protection cover to help with family budgeting, which, whilst down from 23 per cent who said the same at the start of 2009, is alarming due to the long term implications this could have should there be a dramatic change in the family's circumstances.

Mike Rogers continues: "It's always tempting to look at short-term measures when trying to save money. Whilst it may seem that cancelling insurance policies or protection plans is a good way of stretching the family budget, it's really important to keep the bigger picture in mind, to ensure your family's financial security would be protected if a parent were suddenly unable to work due to accident, illness or unexpected job loss."

Childcare costs dominate family budgets - but levelling off

LV='s findings show that childcare costs remain the biggest single drain on the family's resources, and could cost as much as £54,696 for one child between the ages of six months and 16 for a typical household where both parents are working. This includes nursery fees, after school clubs and holiday clubs. However, this cost represents a rise of just 1.6 per cent on the same figure in January 2009, the lowest rise of any category, suggesting childcare costs could be levelling out across the board.

Pocket money creeping back up... but some children are aware of mum and dad's financial pressures

The amount of pocket money a child receives has crept up by almost 5 per cent this year to £4,338, having previous fallen from £5,469 in 2007. However, LV='s study shows that just over one in eight parents (13 per cent) reported being specifically asked for less pocket money by their children, suggesting the need to maximise the family's finances is being felt by more than just mum and dad.

When do children cost the most?

The cost of raising a child peaks during the university years (age 18-21), when parents could face having to pay out a staggering £13,677 a year. But parents of toddlers are likely to find themselves significantly out of pocket too, as between the ages of 1 and 4, a child costs around £13,014 per year. New parents also face a £9,152 bill during the first twelve months of a child's life.

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

  • 1st year - £9,152

  • Years 1 to 4 - £52,055 (£13,014 a year for these years)

  • Years 5 to 10 - £54,171 (£9,029 a year)

  • Years 11 to 17 - £45,399 (£6,486 a year)

  • Years 18 to 21 - £41,031 (£13,677 a year)

Raising children across the UK

Perhaps unsurprisingly, parents in outer London face the biggest cost in raising a child - an eye-watering £220,769. Yorkshire and Humber is the cheapest place (replacing last year's cheapest region, the West Midlands) at £177,706.

Mike Rogers continues: "In an environment where everyone's feeling the strain, it's more important than ever to try and save little and often as it can all add up over the long-term. We'd advise parents to start saving as early as possible, and to consider adding a layer of protection that would provide for them and their family if their circumstances dramatically changed for the worst. Protection doesn't have to be expensive and in many cases, it could turn out to be one of the best investments you'll ever make."

Notes to editors

*Calculations by the Centre for Economics and Business Research for LV=, January 2010
**The Cost of a Child in 2003 was £140,398; the 2007 Cost of a Child figure was £186,032.
***Figures from Opinium Research. Total sample size was 3,953 adults over the age of 18 years. Fieldwork was undertaken from 26 January - 1 February 2010. The survey was carried out online.

About LV=

LV= is a trademark of Liverpool Victoria Friendly Society Limited (LVFS) and LV= is a trading style of the Liverpool Victoria group of companies. The new LV= brand identity was launched in March 2007.

LV= employs more than 3,800 people, serves more than 3.8 million customers and members, and manages around £7.7 billion on their behalf. We are also the UK's largest friendly society (Association of Friendly Societies Year Book 2006/2007, Total Net Assets) and a leading mutual financial services provider.

LVFS is authorised and regulated by the Financial Services Authority and entered on the Financial Services Authority Register No. 110035. LVFS is a member of the ABI, AMI, AFS and ILAG. Registered address: County Gates, Bournemouth BH1 2NF.