Cost of Bringing up a Child
What you need to know
- It's now estimated the total cost of bringing up a child is more than £225,000. Many families in the UK are unprepared for the high costs of raising one or more children
- One of the most costly periods is the age between one and four. Most of the money at this point is spent on a nursery place, but also on clothing and hygiene articles
- School and university education can constitute an additional financial burden, due to the vast amount of extra costs that an education entails. While already the tuition fees have increased over 123% in the past years, education expenses also include uniforms, equipment, meals and travel costs
- Between the age of 16 and 18, young adults become increasingly costly due to a developing range of demands, including pocket money, brand clothing and hi-tech appliances
- Even though some children and young adults chose to take on part-time jobs to earn own money, this hardly ever adds much to the overall family income
- Due to the current economic situation, many young adults tend to live with their parents after finishing their education and often rely at least in part on further financial support
- Parents should always plan ahead and set money aside for later, if they can afford to pay into an account monthly. This is particularly important for parents planning to pay for a private education of their child.
A quick overview
When starting to plan a family, having children is no longer just a personal decision, but increasingly becomes a matter of financial consideration. Young parents in the UK thus often look ahead to calculate the costs of bringing up one or more children.
Looking at recent statistics, the costs that parents are facing for a child from birth to higher education have risen significantly, with the full amount now around £227,000 and more. According to the Centre of Economic and Business Research (CEBR) this means that child support has risen by £5,000 since the last study was carried out in 2013.
Furthermore, the findings suggest that parents spend more than a quarter, usually 28 per cent, of their household income to care for their child. Studies have also found that boys tend to be more costly than girls in direct comparison.
The first few years
In most cases parents support their children up until the age of 21, often even longer as more and more young adults continue to live in the home of their parents. Until children reach full financial independence, they go through a number of different stages, where they rely on the financial support of their parents.
This already starts with early childcare, babysitting costs and nursery places, on top of regular expenditures for food, clothing, toys and hygiene products. Small children are said to be most costly between the age of one and five. Above all, childcare places can be steep with costs of around £177 per week.
In this regard, childcare presents families with some of the biggest household bills of about £60,000. One political factor which has increased the financial pressure on young parents has been the part or full withdrawal of child benefit payments.
The school years
A second most important component that makes raising a child in the UK fairly costly are education and University costs, which have risen significantly in the past years.
Often the amount of money planned for school education does not only include tuition fees, but also school uniforms, books and other equipment, school meals, travel and additional school trips or extra-curricular activities. During this time, teenagers can also appear more costly due to growing demands for own pocket money (£4,458 until the age of 21), brand clothes or hi-tech gadgets in addition to sports or music classes and the necessary equipment.
Many parents feel the pressure to equip their children with the latest technological devices such as laptops or iPads and iPhones to prevent them from falling behind other teenagers of their age. Even though some teenagers at this age might decide to get a part time job, the money earned usually does not cover most of the expenditures and does not contribute to the overall family household.
Naturally the overall costs for private schools are significantly higher still, with £117,357 on average for a day school and £215,853 for a boarding school. Additional costs can occur if parents choose to send their children to summer schools or if the child requires additional private tutoring outside of school.
Altogether parents in the UK thus ended up paying more than £70,000 for a child’s education in 2013.
University education and beyond
Looking at the time after school, university fees significantly increase the financial pressure on families, especially as fees have gone up by more than 123% in the past years. As such, older children are considered most costly between the age of 18 and 21. This is also due to the fact that most students complete several University degrees, often a minimum of two, as many young adults choose to enroll for a Master’s program after finishing their Bachelor’s degree.
Higher education can also be preceded by a voluntary gap year, where young school graduates travel for the time of one year or less, spending significantly more than they might be earning with occasional part-time work. Furthermore, students already enrolled in a program might choose to go on a semester abroad, which can prolong the overall time needed to complete the degree and comes along with additional travel costs.
Frequently, after completing higher education, many young adults remain unemployed while looking and applying for jobs. Many tend to continue living at their parents’ home and often still rely and depend on financial parental support.
In addition, the calculations above do not yet take into account other family-related expenditures. For example, holidays with several children once or twice a year, other family and leisure activities or furnishing a family home with child-friendly appliances can turn out more costly than you would expect.
The calculations: An overview
According to the CEBR if you add up all the costs that raising a child from birth up to the age of 21, you will probably end up with something like the following calculations:
- Childcare: £66,113
- Education: £73,803
- Food: £19,804
- Clothing: £10,935
- Holidays: £16,506
- Hobbies and Toys: £9,433
- Leisure and Recreation: £7,419
- Pocket money: £4,553
- Furniture: £3,453
This overview does not include a range of additional costs that may come up as you go, as you also need to consider possible costs for health treatments and other expenses.
How to be financially prepared
While there is no general rule how to deal with the high costs and expenses of rising a child in the UK, there are a number of things to take into account in order to be prepared more thoroughly. The first aspect is to be plan ahead for upcoming costs and find a way to respond flexibly.
Above all, if you intend to pay for your child’s education privately, it is always good to start saving money from a very early point in time. This may also include the consideration, whether you choose to send your child to a private day or boarding school, as in this case you will be confronted with several additional costs. Education bills can constitute the larger parts of your expenses, so try to set aside monthly amounts, if possible at a minimum of £100. You could look into different types of savings accounts or consider investing in shares to gain the most profit from money that you want to set aside.
If you have savings in a savings account, make sure that your money is in the most rewarding place and find a deal that offers the best return rates. Especially with money set aside for your child’s future you do not want to miss out or even risk losing money in the long run.
If you have room at home and are looking for someone who is taking care of your child while you are at work, it might be worth considering an au-pair-service. They tend to be less costly than childcare places and your child might furthermore profit if you have an au-pair from abroad that can introduce your child to a foreign language.
If grandparents wish to contribute to saving for their grandchildren, there are a range of options to do so, and setting aside money for a grandchild, which can only be accessed at a much later point in time, can be a good way to prevent any financial difficulties in the future.
Take a look at student loans and student financial advice to make sure your child receives favorable rates. Some student loans allow you to only pay back parts of the overall sum if you repay them in a lump sum at the end of the studies.
Next to putting money aside from an early stage, there are also a range of options to save money as you go along. Using second-hand clothing or hand-me-downs from friends, especially in the first years when the child is still growing, can save quite a lot of money but of course sometimes requires an effort.
- Many parents are entitled to a wide range of benefits to help meet the costs of raising children. Visit the official Gov.uk website to find out how you may be able to get some financial assistance
- Childcare vouchers are a great way of helping employees pay for childcare and so return to work. Find out more about them and tax credits at the HMRC website