· Parents are paying nearly £5,000 more to raise a child than they were 12 months ago
· The cost of a child’s first year has seen the biggest increase, rising by almost 5%
· One in five parents (21%) are delaying having another child due to Child Benefit cuts and the increasing cost of raising a family
· Parents now spend 28% the equivalent of of their annual household income on raising a child
· Single parents have been hardest hit by rising costs
The cost of bringing up a child has reached £227,266, up from £222,458 last year, with the first year of a child’s life seeing the greatest increase.
According to the annual ‘Cost of a Child’ report from protection specialist LV=, outgoings on a child’s first year have risen by nearly 5%. This is largely due to the rising cost of childcare, which has seen a 4% increase to £66,113, coupled with more parents returning to work after taking just six months maternity leave[i].
Education and childcare remain the biggest costs, with 71% of parents reporting that they have been forced to make cuts to meet the financial demands of raising their family. The overall cost of raising a child has increased by 62% since LV=’s first Cost a Child Report in 2003.
The full facts: cost of raising a child 2004 – 2014
|
CATEGORY |
THIS YEAR: 2014 |
% DIFFERENCE FROM LAST YEAR |
% DIFFERENCE FROM FIRST REPORT: 2003 |
|
Childcare & Baby sitting |
£66,113 |
3.7% |
66.9%% |
|
Education* |
£73,803 |
1.3% |
123.5% |
|
Food |
£19,804 |
2.8% |
32.8% |
|
Clothing |
£10,935 |
1.5% |
-3.7% |
|
Holidays |
£16,506 |
1.9% |
44.1% |
|
Hobbies & Toys |
£9,433 |
1.3% |
6.5% |
|
Leisure and Recreation |
£7,419 |
0.9% |
16.5% |
|
Pocket money |
£4,553 |
2.1% |
34.5% |
|
Furniture |
£3,453 |
-0.3% |
66.5% |
|
Personal |
£1,157 |
0.2% |
25.1% |
|
Other |
£14,091 |
1.3% |
59.3% |
|
Total |
£227,266 |
2.2% |
61.9% |
*Does not include private school fees but does include day to day costs associated with going to school (e.g. school trips, text books, uniform and school lunch) and university fees
The increasing cost of raising a child means that parents are now estimated to be spending on average more than a quarter[ii] (28%) of their annual income on bringing up their child each year, rising from 23% in 2004.
For more information please visit LV’s website.
[i] CEBR’s model model assumes that parents go back to work after 6 months (what’s known as “ordinary maternity leave”). It thentracks the cost of childcare for the remaining 6 months of the first year, using a combination of data from the Office for National Statistics and desk research from other sources.This cost has increased over the past 12 months meaning more parents have gone back to work after six months based on the increased childcare costs
[ii]According to CEBR, the cost of raising a child from birth to 21 now costs £227,266 or £10,822 per year. The average (mean) annual household gross income is £38,762. This equates to 28% of the average income spent per year on bringing up a child i.e. £227,266 divided by 21 = £10,822. 100 divided by £38,762 x £10,822 = 28%. In 2003 this was just 23% (in 2003 the cost of rasing a child was £140,398 or £6,686 per year.