Budget & Saving

Cost of raising a child increases

The cost of bringing up a child is rising above the rate of inflation, an annual study has revealed.

Parents will fork out £210,848 in the first 21 years of their child's life, the Cost of a Child Report from insurer LV= found.

The cost of raising a child increased by 4.5% over the last year while the rate of inflation grew by 4%, the report said.

Today's figure, which is up 50% from LV='s first report in 2003, equates to £10,040 a year, £836 a month or £27.50 a day.

The alarming statistic has been released as parents look to rein in their spending in order to deal with growing financial pressures worsened by Child Benefit cuts and a hike in university tuition fees. Other expenses facing parents include buying school uniforms and paying for after school clubs.

Overall, the cost of education rose by 5.3% over the last year, if private school fees are excluded from the data.

Childcare and education remain the biggest expenditure, costing parents £67,430 and £55,660 respectively over a childhood.

Other areas that have seen significant increases in 2010 include clothing (up 11.7%), holidays (up 6.4%), food (up 5.9%) and personal care including toiletries and bath equipment (up 5.1%).

Parents spend £9,491 in a child's first year, £13,397 a year on one to four-year-olds, £9,476 a year on five to 10-year-olds and £6,831 on 11 to 17-year-olds, according to the figures compiled for LV= by the Centre of Economic and Business Research.

The university years of 18 to 21 are the most expensive at £14,365 each.

Sam Jackson

Money Dashboard