How Much is the Average Cost of Being a Parent in the UK?
Award-winning life insurance broker, Reassured, recently surveyed 1,500 people up and down the UK to establish how much the population is spending on raising their children.
Their findings found the average cost of raising a child to the age of 18 is now an eye-watering £225,521. That equates to parents spending an average of £12,540 on each child per year.
The research identified food (£1,545 a year) and healthcare (£1,194) as the most expensive elements, with less obvious expenses such as school uniforms (£967), childcare (£1,774), and baby groups (£1,344) also carrying hefty price tags.
These figures are even poignant currently when inflation is rising rapidly and there is a cost-of-living crisis affecting millions of Brits.
London named the most expensive UK city to raise a child
London was identified as the most expensive place in the UK to raise a child, costing parents on average £16,920 a year, equating to a mammoth £304,560 by the time the child reaches 18.
When you consider Londoners also have the most expensive property prices (average £516,285) it is easy to see why so many low-to-middle income families are struggling financially.
From the research, Manchester was the second most expensive city to raise children at £115,551 per year (£279,912 in total), followed by Southampton (£12,120 a year), Norwich (£11,881), and Nottingham (£11,533).
At the other end of the spectrum, the Welsh capital Cardiff was named the cheapest UK city to raise a child at £10,018 each year, closely followed by Belfast at £10,479.
This means over the course of 18 years London (£304,560) is +69% more expensive than Cardiff and +61% more expensive than Belfast to raise children. Newcastle was the cheapest English city in the survey at £10,544 a year.
The importance of having financial protection
The research commissioned by Reassured Ltd did suggest that despite budgetary concerns, the majority of parents (88%) said they “truly believe that having kids was well worth it”, but approximately 50% didn’t expect the costs to be as high as they were.
If you have dependents who rely on you financially then having some form of protection in place is generally a good idea to provision for a worst-case scenario.
If you were no longer around could your loved ones continue their current standard of living and/or afford to remain in the family home long-term?
The past 2 years of the global COVID-19 pandemic have taught us just how fragile life can be, further emphasizing the importance of having some protection in place.
Life insurance is the most common form of cover. It pays out a cash lump sum to your loved ones if you were to pass away during the policy term, which could be used to clear a mortgage, fund future family living costs, cover rising funeral expenses, provide an inheritance, etc.
The cost of life insurance is calculated based on the level of risk you pose to the insurer (or put another way, the likelihood of a claim). So, if you take out cover when you are a young adult with no medical conditions you cover securely around £200,000 of cover from 20p-a-day.
If you have some form of cover through your employer (like death in service) then you can offset the level of personal cover you require, potentially saving you a lot of money in monthly premiums.
Other affordable policy options include income protection insurance and family income benefit, which you may want to consider if life insurance does not meet your specific needs.
