Costs Of Raising A Child

With the average cost of raising a child in the UK now standing at a massive £180,000, parents have to make more and more sacrifices to give their children the best start in life.

According to Liverpool Victoria’s annual Cost of a Child Survey, now in its fourth year, parents could spend £189,136 on raising a child from birth to the age of 21. This cost, which is equivalent to £8,578 a year, is rising faster than property prices and almost four times the rate of inflation.

This survey indicates that getting other people to look after their children is the biggest cost for most parents, with childcare bills totalling a huge £50,000. Not surprisingly, education is the next largest expenditure at £47,000.

The Survey shows that the total cost, from birth, for a child attending private school, on a day pupil basis and then going on to university, tops a quarter of a million pounds.

Education Is Priority

As we all know, a top quality education is one of the most valuable gifts you can give a child. Also, for people with an international lifestyle, the stability of private education is likely to be their only viable option but this does not come cheap. Starting with the cost of private education in the UK, the average fee for boarding school is £20,136 per year. On top of this will be the additional costs for uniforms, books, sports equipment, trips and even flights home. So, the cost of educating one child alone is a major expense.

Then, after the now almost requisite gap year that will invariably require parental financial assistance, there’s the ever-increasing cost of tertiary education. Another 2007 survey, NatWest Student Money Matters, shows that new students expect to pay an average of £34,740 for a three year university course and anticipate graduating with a debt of nearly £15,000^.

Students

Many students take on part time jobs to help fund their time at college but it is extremely unlikely that they could make anywhere near this amount. So how can we as parents help out? As much of the expense of a child’s education will fall on the parents, the earlier you can start saving the better.

As the amount required is substantial, and if you can take a medium to long term approach, you should be looking for an investment that gives real growth potential, with a wide range of investment options including bonds, global equity and managed funds. You can also look into taking advantage of any tax planning opportunities open to you.

To discuss your pension investments with us, fill out the form on the contact Qrops Adviser page or email us direct at info@qropsadviser.com