The most recent report from LV= shows that the cost of raising a child has increased by more than 3% in the last year. The total cost of raising a child from birth to the age of 21 is now measured at an eye-popping £218,024.
The biggest factors in the cost are education and childcare amounting to more than £71,000 and £62,000 respectively. In fact education saw the biggest annual increase of 5%, with school uniforms, after school clubs and not least university tuition fees contributing to the rise.
It’s no surprise therefore that the majority of parents spend time looking to cut costs wherever they can. The report found that 76% of parents had made cutbacks due to pressure on their budget and 43% had reduced the amount that they regularly save.
It’s always a good idea to review all areas of your monthly budget and of course your mortgage should be one of those areas, especially as it will generally be the largest outgoing. However, these figures really underline how important it is to have adequate protection in place to deal with the huge cost of raising child in the event of death or inability to work.
Shockingly, the report found that roughly only a third had life cover in place when families should be considering whether they have enough protection in place. They certainly should not be tempted to cut their policies in an effort to save money. That could prove to be a false economy if something unexpected should happen, especially as life assurance is such a cheap form of cover and raising children is such an expensive business.