LV the countries largest friendly society, has for a number of years been carrying out annual research on the cost of having children from birth to 21 years of age. The latest survey report published earlier this year shows that the average cost per child has now risen for the first time to over £200,000, rising from an estimate of nearly £194,000 in the 2009 report.*
This seems now to be a surprisingly large sum of money; to feed, clothe, educate and provide for a child for 21 years, averaging almost £10,000 for each of those years. What costs in early years, first as nappies, moves on to childcare, school costs and eventually the yearly cost peaks to meet the increasing cost of higher education or support during times of limited employment opportunities for young adults. According to the figures, during university years the cost to parents for an 18-21 year old, averages close to £4,000 per year.
Findings from the annual survey by the Daycare Trust, the national childcare charity, also published early in 2010 show that despite the recession, nursery fees rose by 5.1%, with an average cost to parents in England of nearly £5,000 p.a. In some areas, notably London, nursery places could cost up to £11,000 p.a., equating to £212.50 a week for 25 hours of childcare.**
The pressure on the purses of parents and families is continuous and the evidence is of increases, forcing people to rein in other areas of expenditure. Parents talk about wanting the best for their children and making sacrifices, and for new parents the new experience often combines the cost of providing equipment and adaptations for the newborn, with the loss of an income.
Whilst it’s difficult for many parents to see much beyond the immediate future and demand on funds – Christmas, the school trip, dance lessons, etc., there ought to be
serious thinking with the children to make saving, no matter how limited, a part of their thinking and lifestyle.
There may be a national argument for consumer spending needing to drive economic recovery, but inside the family, the motivation to save may be more significant for the future well being and success of the children.
Today the cost of getting onto the first rung of house ownership is increasingly likely to be provided for by parents and grandparents. Is this how it’s going to be in 21 years time?
*Calculations by the Centre for Economics and Business Research for LV=, January 2010. The Cost of a Child in 2003 was £140,398; the 2007 Cost of a Child figure was £186,032.
** The Daycare Trust survey was compiled by survey responses from Family Information Services in England, Scotland and Wales, who provide information, advice and assistance to parents, carers and professionals on the range of children, family and young people’s services available within their area.