New research has shown the cost of raising a child has risen by nearly £5,000 over the past 12 months.
According to insurer LV=, it now costs £227,266 to bring up a child from birth, until they reach the age of 21.
The key findings of the LV= ‘Cost of a Child’ report include:
- The cost of raising a child has risen by 62% since the report was first produced in 2003
- The cost of a baby’s first year has risen by 50%, from £7,372 in 2003 to £11,025; the increase is mainly due to rises in the cost of childcare
- Parents now spend £66,113 on childcare, nearly a quarter of the total cost of raising a child
- 21% of parents will delay having another child due to rising costs and benefit cuts
- Parents now spend 28% of their household income on raising a child and unsurprisingly single parents have been hit hardest by rising costs
Child benefit cuts hit hard
The report reveals the true cost to families of the child benefit cuts.
Families where one parent earns above £60,000 each year lost all of their child benefit in January last year. Where one parent earns between £50,000 and £60,000 per year, the benefit has been reduced, but not cut completely.
The cuts have affected around 1.5 million families and according to the report have created real financial hardship for many:
- 1 in 4 mothers have returned to work earlier than they would have liked to
- Close to 1 in 5 mothers have had to work more hours to make up the shortfall
- 1 in 5 parents have delayed having another child because of the cuts and 1 in 10 have decided to have a smaller family
Reacting to the report Mark Jones, Head of Protection at LV= said: “Having children has never been more expensive. The costs associated with raising a family are set to remain a pressure point for families across the UK but seeing the cost of raising a child in its entirety can help people think about how to secure their family’s financial future should anything unexpected happen. We would also urge parents to think again before cutting back on insurance such as life cover or income protection. If either parent becomes unable to work or is no longer around then this type of insurance can protect you financially at a time when you most need it.”