How much does it cost to raise a child?
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Last updated: 26 May 2021
It’s no secret that raising children can be an expensive business, but do you know just how much it could set you back?
This guide takes you through the average cost of raising a child, and breaks down what makes up the expense, with a focus on childcare and education. We also take a look at the different cost of having boys and girls, and some ideas on how you can do some kid-based cost-cutting.
How much does raising a child cost?
According to a study by the Child Poverty Action Group, raising a child to the age of 18 is now estimated to cost:
- £75,436 for a couple
- £102,627 for a single parent or guardian
It’s also important to note that these figures are just what you spend on the child themselves, so costs such as housing, council tax and childcare are excluded. This means the real cost is even higher, up to double these numbers!
All families are different, and the cost can vary hugely depending on your circumstances and the lifestyle your family chooses to lead. However, the estimated figures provide a good starting point to give you an idea of how much raising a child will cost.
The Early Years and Childcare
The early years can be a particularly expensive time for any family. Especially when having your first child, buying all the clothes and equipment you need can be very costly. However, there are things you can do to help keep these costs down:
- Your child will be more happy with less than you think: This is something to remember throughout your child’s younger years. Children don’t need the latest gadgets and the most expensive gear to be perfectly happy.
- Budget: Whilst it may sound obvious, you’d be amazed how many people do not make a budget plan and stick to it. It really can save a huge amount of money.
- Let people help: Accept hand-me-downs and favours, these can help you save money and your sanity!
- Keep an eye on online marketplaces: for example, Freecycle, Facebook Marketplace and Gumtree have a huge amount of cheap or even free equipment that saves you a purchase.
A significant cost in these years is childcare. According to some studies, between 2008 and 2016, childcare costs rose by an average of 4 times across the UK and it’s thought to have increased by as much as 7 times for those seeking childcare in London. This financial burden can be particularly large for single parent families, or families where both parents go to work. It’s worth noting that as of 2019, there is tax-free childcare available. This can save you up to 20% on childcare fees.
The Teenage Years and Education
Teaching your children financial responsibility as early as possible is one of the best ways to keep costs down during the teenage years. Making mistakes, financial or otherwise, is a very natural part of growing up, but these mistakes can cost you a lot in the long run.
You can teach them to have this kind of financial responsibility in a number of ways. You can help them set up a bank account by the time they’re 13, encourage them to get a part time job, or even offer them payment for doing extra jobs around the house. Another important step is limiting their expense. Don’t say yes whenever they want something new, make them choose between their phone contract and that new pair of trainers for example. You can suggest that they save their own money to pay for anything else they want.
Depending on the choices you make as a family, education can be a large cost. Due to the state education system in the UK, it’s thought that the average household spends only around 1% of their yearly income on education. Only around 7% of children and teenagers are privately educated, however many more go to university. If your family is in a higher income bracket, your child may not be able to get enough student finance from the government to survive at university without financial support from you. This can be a big cost and it may be worth saving for this well in advance. It may be a good idea to open an ISA or another savings account that your child can have access to when they turn 18. The good thing about them is they are a tax-free saving option but bear in mind, that once they have access to it, it is theirs to do with as they please.
Boys and girls, what’s the difference?
There can be a significant difference in the cost of raising a child depending on whether you have a boy or a girl. Some studies have suggested it is up to 46% more expensive to raise a girl, costing an average of £108,884, as opposed to £79,176 to raise a boy.
For a study of 4-18-year olds it was found that some items, such as baby gear and school items, cost pretty much the same whether you have a boy or a girl. However, when it came to toiletries, beauty and clothes, girls came out on top with a significant spending margin, with up to five times as much spent over the 14-year period. Boys tended to cost slightly more in categories such as toys in the early years, and later on they took the lead in the purchase of hi-tech items and other gadgets.
It should be noted again that these figures and relative spending will vary hugely depending on your family and the individual circumstances and wishes of your children.
Do I need life insurance when raising a family?
Having life insurance is never a requirement in the UK, although you’d be wise to consider taking out a policy if you’re starting, or planning, to raise a family. A life insurance policy can ensure that your children are still supported by an income if you or your partner sadly pass away.
Of course, this will add to overall cost of raising your children, but it shouldn’t cost you an arm and a leg. The exact cost of your life insurance will depend on a variety of factors about your lifestyle, age and general health, but policies start at under £5 a month.
Life insurance can be paid out in a lump sum or in installments, and it can also go towards covering funeral costs or paying off your mortgage. To see how much it will cost you to protect your family financially should the worst happen, compare life insurance policies now.