New research has shown the cost of raising a child has risen over the past year.
According to Quidoco.com, the cost of raising a child has increased to £2,774 per year, equivalent to a total of £51,000. However, as this figure only takes into account costs up to the age of 18 and does not include the cost of university or higher education, the real figure will be much higher for many parents.
The research shows the biggest areas of expenditure are leisure activities and after school clubs, which add up to just under £1,000 per year.
Andy Oldham of Quidco said: ’’You always think about things like clothes, school uniform and sports clubs costing a small fortune but there are so many other things that mean you have to open your wallet.
‘’Things like the petrol to ferry your children around and pocket money all leave a hole in your bank balance.”
Household bills soar
At the same time as the research from Quidco, new figures have shown that household bills have risen by over 40% since the start of the financial crisis.
The Bacs Family Finance Tracker, which looks at the finances of 4,000 families, shows average household bills have risen from £5,834 five years ago to £8,202 in 2012. Discretionary spending, on items such as mobile phones and gym memberships, has also risen by around £300 per year to £4,146.
Mike Hutchinson, of Bacs, said: “Our latest research clearly shows that hard-pressed family budgets are being strained more than ever.
The household purse is increasingly being squeezed and a big bill could tip the family budget over the edge, but splitting that cost across the year could relieve some of the strain and with the discounts offered from many billers and service providers for paying by direct debit, there’s an opportunity to save some vital pounds.”
However, it isn’t all doom and gloom, as different research shows pay levels slowly rising, whilst inflation fears are reducing.
Markit, the financial information company, has revealed that the pressure on household finances has reduced to the lowest level for three years.
During May, 9% of households surveyed said their personal finances had improved, although a further 28% said they had worsened, this still represents the slowest deterioration seen since May 2010.
Tim Moore, Senior Economist at Markit, said: “May’s survey is a clear indication that the gloom is lifting over household finances”
“Budgets were under the least pressure for three years and rising workplace activity added to hopes in some quarters that their household finances may at last enter a period of relative calm”
“A renewed rise in take-home pay and lower inflation perceptions were the main factors boosting households’ financial sentiment in May. Alongside this, news that the UK economy avoided a triple-dip recession probably helped create a relief element to the rise in households’ financial perceptions.”