Articles

How much will it cost to raise a child in 2024?

8 minutes

Rising parenting costs are causing difficulties for families, whether it’s childcare or higher education fees. What will 2024 bring, and how can parents manage their finances?

  • The cost of raising a child is still increasing.
  • Having a child is encouraging parents to pursue their careers.
  • Higher education fees are leaving many unable to afford further education.

Understanding the true cost of raising children in 2024 can help you plan your finances

The average cost of raising a child to 18 in the UK is £166,00 for a couple and £220,000 for a lone parent

The total cost of raising a child is the highest it has been since calculations started in 2012 according to Child Poverty Action Group (CPAG).[1] This increase has been attributed to higher prices caused by inflation and year on year shortfalls in household incomes since 2016.[2]

According to The Times, the average cost of raising a child from birth to 18 in the UK is £223,256. This includes housing and childcare costs. That’s around £12,400 a year, or £1030 a month.

Cost of nursery

Children in the UK receive free pre-school education from the age of three. Up to that point, parents who want to send their children to nursery have to pay for it themselves. The cost of sending your child to nursery has increased compared to last year. 

In 2023 the average cost for a part-time nursery place for a child under two was £148.70 per week, meaning that families sending one child to nursery for 25 hours per week could expect to fork out more than £7,134 annually, a 6.2% increase from 2022.[3].

Childcare costs

A recent 2023 Childcare Survey from Coram Family and Childcare, which is recognised as one of the most comprehensive industry surveys, found that parents were paying on average 3% more for childcare in 2023 than they were a year prior.

Based on this growth, childcare costs are expected to increase in 2024 as well. Parents have already experienced rising childcare costs over the past five years with the government ending the childcare voucher scheme in October 2018. The vouchers have now been replaced by Tax-Free Childcare

‘We missed out on the first few months of Tax-Free Childcare after our daughter went to nursery as it's so badly promoted', says journalist and mum Shannon Kyle (@ShannonDotKyle). ‘It was only through a friend we heard about it and immediately signed up. The system is hard to navigate and sometimes goes wrong, but it saved us 20% per month on fees, which adds up to about £150 – a great saving.’

Added pressure on working parents?

Data from the Office for National Statistics (ONS) suggests that mothers often have to return to work after giving birth due to high childcare costs. From April to June 2021, 75.6% of mothers with dependent children were in work, up from 66.5% in 2002, reaching its highest level to date.[4]

Of course, money is only one factor. Women are now less likely to choose being a stay-at-home mother over their career ambitions. In fact, 24% of new mothers were more interested in their career after having a child.

Household spending costs

With the UK currently in a cost-of-living crisis, inflation continues to remain at a high level. According to NimbleFins the estimated average UK weekly household spend was £628 per week in September 2023. 

“The average UK weekly household spend was estimated at £628 per week towards the end of 2023”.

Government data shows that the Consumer Price Index including the housing costs of owner-occupiers, or CPIH, rose by 4.2% in the 12 months to December 2023.[5]  The CPIH is based on the average prices for a basket of around 700 commonly purchased goods and services.

Ofgem announced that the Energy Price Cap for the period of January to March 2024, the energy price cap is set at £1,928 for a typical household per year.[6]

The average UK weekly household spend was estimated at £671 per week towards the end of 2022

Government data shows that the Consumer Price Index including the housing costs of owner-occupiers, or CPIH, rose by 4.2% in the 12 months to December 2023.[5] The CPIH is based on the average prices for a basket of around 700 commonly purchased goods and services.

Ofgem announced that the Energy Price Cap For the period of January to March 2024, the energy price cap is set at £1,928 for a typical household per year.[6]

Education costs

Continuing cuts to the education budget could see schools relying more and more on parents’ voluntary payments.

Parents in the UK don’t actually spend much on education when compared to their other costs, due to the state school system. In fact, only 1% of the average household spend goes towards education, according to the ONS. 

Parents aren’t obliged to help fund their schools, though, and children can’t be exempted from activities that need parental funding because their parents can’t pay. Of course, there will be parents spending more on education.

There are establishments that are finding novel ways to provide affordable private education despite the cuts, including The Independent Grammar School: Durham – a private school that opened its doors at the start of the 2018 school year, which is charging parents £75 per week.

It is when children reach 18 and begin considering higher education that the real costs begin to kick in. University fees for home students in the UK have risen to £9,250 per year, with a total average cost of £27,750 per student to achieve an undergraduate degree.[7]

‘If your child is still young, then start saving for their higher education now,’ recommends Kalpana Fitzpatrick, financial journalist and founder of MummyMoneyMatters.com (@MumMoneyMatters). ‘One if the best ways to kick start their university fund is a stocks and shares Junior ISA. This is a long-term investment option for five years, or ideally ten years, but the return potential is much higher than that of a cash ISA.

‘But beware: once the money is in, it belongs to the child to do as they please with when they’re 18,' she adds.

 

Sources

[1] https://cpag.org.uk/news/cost-child-2023

[2] https://cpag.org.uk/Cost_of_a_Child_2023_full.pdf

[3] https://www.familyandchildcaretrust.org/Childcare.pdf

[4] https://www.ons.gov.uk/e/labourmarket (this is the latest most up to date) 

[5] https://www.ons.gov.uk/economy/inflationandpriceindices

[6] https://www.gov.uk/energy-bills-support-factsheet-8-september-2022

[7] https://www.topuniversities.com/how-much-does-it-cost-study-uk