Articles

How much will it cost to raise a child in 2025?

26 February 2025

8 minutes

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Rising parenting costs are causing difficulties for families, whether it’s childcare or higher education fees. What will 2025 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 2025 can help you plan your finances

The cost of raising a child to age 18 is £260,000 for a couple and £290,000 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 the fact that costs have risen much faster than income via social security for all family types.[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 2024 the average cost for a part-time nursery place for a child under two was £157.68 per week, meaning that families sending one child to nursery for 25 hours per week could expect to fork out more than £7,569 annually, a 7.4 % increase from 2023.[3].

Childcare costs

A recent 2024 Childcare Survey from Coram Family and Childcare, which is recognised as one of the most comprehensive industry surveys, shows that costs has increased by 7.4% in comparison to 2023 across Great Britain and comes at a time of sustained cost of living pressures for many families.

Based on this growth, childcare costs are expected to increase in 2025 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 The vouchers have now been replaced by Tax-Free Childcare.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 £625 per week (£2,700 a month) to cover living expenses including a roof over our heads, food in our bellies, clothes on our backs, and transport to and from work or school—but costs are higher if you rent or have a mortgage.

“In mid 2024, NimbleFins estimates that the average UK household budget is around £2,700 a month (or £32,500 a year) based on an average of 2.3 people per household [5],”.

Government data shows that the Consumer Price Index including the housing costs of owner-occupiers, or CPIH, rose by 3.9% in the 12 months to January 2025.[6] The CPIH is based on the average prices for a basket of around 700 commonly purchased goods and services.

The cost of gas & electric has plagued both businesses and households for a few years but has thankfully dropped in the past year—previously, households were shelling out nearly £5,000 a year on average for their utilities. And now there is some energy switching back in the market.

As of September 2024, the average household energy bill is around £1,700 [5].

To gauge a basic minimum for food costs, we can look at the budgets of our poorest households, who are presumably eating as cheaply as they can. Households with disposable incomes less than £12,948 per year still spend around £3,000 annually on food and alcoholic drinks in total. They eat at home more often, spending around 83-84% of their food & drink budget for consumption at home, with the other 16-17% of the food budget spent out of the house.

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.