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Cost of raising a child more than £200,000 23 February 2010
Myra Butterworth (about the author)

The cost of raising a child has passed £200,000 for the first time, according to research.

The figure equates to £800 a month and is a shocking reminder to parents of the financial burden of providing for a child until the age of 21.

The costs have increased 4 per cent to £201,000 since last year and are 43 per cent higher than in 2003 when the annual survey was first carried out by insurer LV=.

Asda sells George school uniforms for £4.75 Mike Rogers, group chief executive of LV=, said: “Every parent will know how expensive it can be to raise a little one, and as parents, we know we don’t begrudge a single penny of it. But I suspect many new and prospective mums and dads will be a little shocked to see the potential financial burden ahead of them.”

Childcare is significant cost

Childcare costs remain the biggest drain on family finances, reaching more than £54,000 for a child between aged six months and 16 years old.

The figure includes nursery fees, school clubs and holiday clubs, and is £1,000 higher than last year and up more than £20,000 since 2003.

Education costs have also risen to almost £53,000, but this only covers costs such as lunches, sports kits and transport and excludes school fees.

Adrian Lowcock, of independent financial advisers Bestinvest, said: “It is even more important that families make arrangements now to save for the future, particularly as the cost continues to rise even while the economy remains weak.”

The cost of raising a child peaks during university years when parents face paying out almost £14,000 a year.

Parents can reduce their costs by moving, according to the survey. Those living in London face the biggest cost in raising a child at £220,000 compared to the cheapest location in Yorkshire and Humberside where costs are £177,700.

It comes after separate research revealed last week that a third of parents are remortgaging their home to raise the £30,000 typically needed to help support their grown up children.

Source: The Telegraph