The cost of raising a child has soared by over a third in the last five years to hit a record £186,000 according to the latest research from investment group LV=.
The annual 'Cost of a Child' survey has revealed that parents could spend £186,032 on raising a child from birth to the age of 21, which is equivalent to £8,859 a year, £738 a month or £24.30 a day.
While the cost of childcare and education remain the biggest expenditures at £50,538 and £47,310 respectively, the company predicts that the overall cost of raising a child could rocket by 90 per cent to more than £265,500 by 2012.
Nigel Snell, Communications Director at LV=, comments on the findings: “The projection figures are quite staggering and it’s unrealistic to expect people’s income levels will increase in line with this rising level of expenditure. This means parents will need to be switched on about their family finances more than ever, even though they have always known that raising a child is costly. With UK debt figures rising we would recommend starting financial planning as early as possible to help meet the various costs associated with raising a child.”
Across the country, however, the costs do vary considerably and, unsurprisingly, Central London came out top as the most expensive area for raising a child with the average costs mounting to £199,869, followed by Outer London (£199,578), and the South East (£195,396). However, Wales is the most economic choice costing around £179,317.
According to the study, increasingly high child care costs and the university years are the most expensive times in a child's life with the average household spending £34,320 on their child's nursery care from six months to primary school age. With the added expense of after-school clubs and holiday clubs, the total cost is around £312 per child each month.
And for those parents choosing to put their child through private school, the costs escalate further with an additional £72,957 for a day pupil, and a further £130,557 if the child boards. In total, a child who attends private school then university will cost their parents more than quarter of a million pounds between birth and the age of 21.
Mr Snell continues: “As a parent of three, I know from experience that sacrifices have to be made in the early years, and many parents will have had to put some plans on hold to manage the costs associated with raising a family. Of course, every parent will tell you that it is all worth it, but making even small provisions and doing a little extra planning now could help new parents see their way more easily through the next 21 years.”
Find out more about child trust fund accounts
, children's savings accounts
and high rate savings accounts
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