Cost of Bringing up a Child

A family of four children, all kitted out in new clothes and uniforms, demanding their own hi-tech gadgets, designer gear and a university education, will have set their parents back a staggering £775,000 over 21 years, according to the annual report from insurers Liverpool Victoria.

A growing list of needs

Childcare and education costs present the biggest bills, costing £53,818 and £50,240 respectively in 2009.

While most British mothers are aware of the cost implications of their new arrival, nearly a quarter admitted they were not fully prepared for the financial burden of bringing up a child.

In many families both parents have to work to meet the growing list of needs their children have – and one in three parents said they sent their child to summer school at least three times a week, spending an average of £14,319 on after school clubs, and £3,645 on holiday clubs over the years.

Once children enter their teens, they increasingly hanker after designer goods and items to keep up with friends at school.

Four in 10 parents found 16 to 19-year-olds to be the most demanding and costly, as the pressure of being "cool" comes at a price.

Although many teenagers get a part-time job, the study revealed that the money they earn is unlikely to make a significant difference.

The breakdown

While the cost of parenting reaches its peak during university years, costing a total of up to £39,192 over the course of a three year degree, first-time parents could also find themselves struggling if they’re unprepared.

• First year: £8,853
• 2-5 years: £12,683 a year
• 6-11 years: £8,627 a year
• 12-18 years: £6,177 a year
• 19-21 years: £13,064 a year

Education costs

While the figures seem extreme, the cost of bringing up your children has not radically changed over the years. According to estimates from newspapers a century ago, the cost of bringing up a male child “from infancy to an age of economic independence" was £2,708.

Taking inflation into account over the period, the sums work out very much the same.

Unfortunately, the modern parent has now to think of university fees and paying for their child’s ”gap year” too which, for those who travel, means an average of £9,000 just for the year between school and university. For a child born today that would mean parents putting aside £45 a month for 18 years to fund the gap year.

If you intend to pay privately for your child’s education – or just for their university years – then the earlier you start saving, the better.

Private boarding schools can cost up to £15,000 a year, while private day schools may charge up to £7,500 a year to educate a child aged 13-18.

Education bills can be huge once you add all the extra costs up such as uniforms, travel and meals. Undergraduate fees currently stand at £3,000 a year, though the Government has indicated that these might soon increase.

Start saving early

The least painful way to pay for your child’s education is to set aside money now, on a regular monthly basis at a minimum of £100 a month, if you want to send your newborn to a private school by the time they are 11 years old.

Thick carefully about where you’re going to keep your savings – while you will want a good return on your money, you don’t want to take unnecessary risks with your child’s education fund.