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Catch up with the latest press releases from LV=

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LV= Cost of a Child

Press release: 23/01/2009

  • Childcare and education remain biggest costs, over £50,000 each
  • Eight out of ten parents cut back on spending as credit crunch bites
  • Family savings and protection suffer as parents cut back
  • Pocket money at lowest level since 2004
  • Cost up 4% since last survey, up 38% over last five years
  • Outer London is most expensive place to raise a child

The annual survey from insurance and investment group LV= on the Cost of a Child, now in its sixth year, shows that parents could spend £193,772 on raising a child from birth to the age of 21. This is equivalent to £9,227 a year, £769 a month or £25 a day.

The survey by the UK's largest friendly society(1) shows that the cost of raising a child has increased by 4% since the last survey in December 2007 and is up 38% over the five years since the survey began in 2003(2). Childcare and education remain the biggest expenditures, costing parents £53,818 and £50,240 respectively.

Mike Rogers, LV= Group Chief Executive, said: "Every parent knows how their hard-earned savings can dip thanks to eye-watering education and childcare costs. It is also likely to be of little comfort to mums and dads to hear that pocket money costs are at their lowest level since 2004, or that expenditure on family holidays in 2008 was only 4% up on the 2003 cost(3)."

The Expenditure in Detail.

The £193,772 total cost of raising a child in the UK is spent in the following principal categories:


Jan 2009 costs

Dec 2007 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)








Credit Crunch forces parents to cut back

More than eight out of ten parents (81%)(4) have had to cut back on family expenditure as a result of feeling the pressure financially in the economic downturn. Family activities are the main casualty, with over half of parents admitting to curbing their spending on holidays and short breaks (52%), as well as reducing spend on leisure and recreational activities (52%).

Parents say they have also reduced their spending on the following areas:

  • Clothing - 47% of parents spending less on clothes

  • Savings - 42%

  • Furniture & furnishings - 38%

  • Food - 35%

Purchase of 'value' items on the increase

In order to economise, eight of out ten parents (79%) are consciously buying lower cost items and supermarket ‘value' items. A third of parents (35%) are buying second hand items to help make ends meet, with the same number selling unwanted items through eBay, other online sites, via their local newspaper, or car boot sales, to raise money.

Family savings and protection at risk

The pressure on family finances has also caused over one third of parents (37%) to reduce the amount they save regularly. Worryingly, one quarter of parents (23%) say they have also had to cancel or review their life insurance and income protection cover to help with family budgeting, which could have significant long term implications.

Mike Rogers continues: "Although parents are feeling the pressure financially, it is important they try to look beyond the short to medium term money worries. Life insurance and income protection are more important than ever in the current climate – the financial security of a family could be hugely affected if a parent was unable to work long term because of an accident, illness, or job loss."

Childcare costs on the rise

Childcare from six months until the age of 14 could cost as much as £53,818, or £332 a month, for a typical UK household with two working parents. This cost is up 6.5% per cent on the December 2007 LV= survey(5), and covers nursery fees of £35,854 from six months to school age, £14,319 for after school clubs, and £3,645 for holiday clubs.

Uni tops education costs

The average household could spend £50,240 on education over their child's lifetime, which includes a whopping £34,300(6) on a three year university degree course. This includes annual tuition fees, travel, books, and living costs, including rent, bills and household items.

Parents putting their child through private school could pay an additional £71,660 or £129,260 if their child boards(7). This would take the total Cost of a Child from birth to age 21 to £265,432 for a child who goes to private school as a day pupil, or £323,032 if they board.

Pocket money down

Across the UK children receive £4,144 in pocket money between the ages of 5 and 18 years, which is equivalent to £319 each year(8). However, this is £1,325 less than the total in December 2007 (£5,469), and £1,374 less than the 2006 amount.

Annual breakdown – university years remain the most expensive

The cost of raising a child peaks during the university years, when parents could pay out a staggering £13,064 a year. But new parents may find themselves significantly out of pocket as well, as the first twelve months of a child's life could cost £8,853.

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

  • 1st year - £8,853

  • Years 2 to 5 - £50,732 (£12,683 a year for these years)

  • Years 6 to 11 - £51,760 (£8,627 a year)

  • Years 12 to 18 - £43,236 (£6,177 a year)

  • Years 19 to 21 - £39,191 (£13,064 a year)

£134 billion cost of raising all children in the UK

The cost of raising all the children born in the UK in 2007 could be a massive £133.7 billion(9), not including the impact of any future inflation.

Regional variations – Outer London is most expensive

Regionally across the UK, the research shows that parents in Outer London spend the most on raising a child (£211,977), followed by Inner London (£202,644), and East England (£200,274). The West Midlands is the cheapest place to raise a child (£186,641), followed by the North East (£186,818) and the North West (£188,847).

Mike Rogers continues: "Our research shows that parents are being very resourceful when it comes to budgeting and cutting back on non-essential spend. Planning ahead is more important than ever though, and saving as much as you can, just a little and often, could help to ease the financial pain."

Tax efficient savings can make your money go even further. Individual Savings Accounts (ISAs) are a great way to save and the new LV= ISA gives parents the opportunity to invest in a fund that suits them, at a time that many are seeing as a good buying opportunity.

About LV=

Notes to editors

  1. Association of Friendly Societies Year Book 2006-2007, Total Net Assets.

  2. The Cost of a Child in 2003 was £140,398; the 2007 Cost of a Child figure was £186,032.

  3. The expenditure on Holidays in 2003 was £11,450, in 2008 the cost was £11,920.

  4. Figures from Opinium Research. Total sample size was 4027 adults over the age of 18 years. Fieldwork was undertaken from 9th-13th January 2009. The survey was carried out online.

  5. Childcare costs in 2007 were £50,538, compared with £53,818 in today's survey.

  6. Based on NUS (2005/2006) estimates on expenditure for course fees and living costs, with inflation applied where necessary.

  7. Source:

  8. Source: Halifax Pocket Money survey, 2008.

  9. In 2007 there were 690,013 children born in the UK (ONS, 2008; This number multiplied by £193,772 equates to £133.7bn.


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 3,700 people, serves more than 3.6 million customers and members, and manages around £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.

Liverpool Victoria Friendly Society Limited 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