THIS IS HOW MUCH IT COSTS TO RAISE A CHILD IN 2024
The cost of raising children has soared over the course of the past decade, leaving many parents struggling to make ends meet. Research from investment experts Moneyfarm suggests it now costs more than £220,000 to raise a child to the age of 18.
Another study, by SmarTrike suggests that the figure is even higher.
They found that the cost of early-years childrearing has gone up 75 per cent over ten years, due mainly to an increase in childcare costs.
These figures take into account costs of £23,500 a year to parent younger children thanks to a £15,000 a year average cost of childcare for a child under two.
Laura Suter, director of personal finance for DIY investment site AJ Bell, says that average childcare costs for one child now swallow more than half of the average wage in some areas of the country – before you have put a roof over your own or their heads –leaving all too many parents struggling.
‘We can see it’s not viable for many people to make ends meet,’ she says.
How the cost of children has risen since 2013
Parents are being hit from all sides
Studies show that parents have borne the brunt of the cost-of-living crisis, with many of their costs rising far above the rate of inflation.
Childcare costs rose six per cent last year, above the inflation rate, while many working parents are also dealing with ‘return to office’ mandates from their firms that are increasing their childcare needs.
One childcare provider – Pebble – calculated that on average those parents who had been asked to return to the office are paying an extra £664 in childcare every month, a huge amount of money for any family to try to find.
Food and utility prices have also soared, hitting families particularly hard as they attempt to put food on the table.
The most recent figures suggest that a fifth of families with children are living with food insecurity, meaning that they do not have reliable access to sufficient regular food, compared to 15 per cent of total households.
Foods aimed specifically at children have risen in price at above the rate of inflation, with the First Steps Nutrition Trust calculating that the price of baby formula rose 24 per cent between March 2021 and April last year.
Other increased parenting costs include school uniform, with secondary school kit costing £422 in 2023 against £337 the year before, while the cost of hobbies and activities for children rose 33 per cent to an average to £4,193 last year, according to Moneyfarm, and is still rising.
Help on the way?
The government has announced several policies aimed at helping parents with the cost of their children. However, some are proving difficult to access and others are misunderstood.
One of the most valuable among these is the provision of free nursery hours for very young children.
At present, you can get 15 hours of free childcare if your child is two, rising to 30 hours of free childcare when your child is three to four.
From September of this year, you should be able to get 15 hours of free childcare from when your child is nine months old.
Are you getting everything you should?
For families feeling their income squeezed by rising costs, getting all the help available will be the difference between sinking and swimming, experts say. Consider the following:
Get all you are entitled to
Not everyone claims every benefit they can. Use the Entitled To benefits calculator to ensure your family is getting the financial help they need. entitledto.co.uk
Sign up for free childcare hours
Free hours can make a big difference to rising childcare bills. You can register for 15 free hours a week for children under nine months from May 12 of this year, with the scheme starting in September, so check your eligibility online.
gov.uk/check-eligible-free-childcare-if-youre-working
Reconsider Child Benefit
If you previously stopped claiming Child Benefit, it’s time to see whether the new thresholds change the calculation for you.
If the highest earner in your household earns under £60,000 you will be eligible to keep all the payment, while those earning between £60,000 and £80,000 will keep some of it.
If you choose to keep it and earn between these brackets you will need to fill in a tax return to pay back some of the money. There is more information on this on the Government website.
Even if you aren’t eligible to receive child benefit, because either you or your partner earns too much, you should ensure you register to be eligible for it anyway, and then not claim the cash, which is also something you can do online.
This ensures you receive credits towards your state pension entitlement.
gov.uk/child-benefit-tax-charge/restart-child-benefit
Do the maths on tax-free childcare
If you don’t receive any benefits except child benefit and earn under £100,000, you should be eligible for tax-free childcare, saving you up to £2,000 a year.
You can get this at the same time as free childcare hours. There is more about how to do this on the government website.
This can be used for after-school clubs for older children, or for registered holiday clubs to take down costs during the summer holidays.
Long nursery waiting lists
There has been a muted reception to free nursery hours and for good reason. As many young parents will testify finding a place for their little ones can be a real struggle.
In some areas of the country, there are waits of over a year for a nursery place, with many parents being asked to shell out a non-refundable deposit just to get on the list in the first place.
Lauren Sian, a candlemaker from the Highlands of Scotland, says that she’s eligible for the free hours for her son but is unable to find a nursery that will take him. ‘I’m stuck paying full whack for a childminder,’ she says.
What to do if you have to wait
Other ways to take down the cost of childcare include the Tax-Free Childcare scheme, which offers parents up to £2,000 each year to help with the cost of childcare – but is only available to those who do not get Working Tax Credits, Child Tax Credit, Universal Credit or childcare vouchers.
Also, some families who have not been eligible for Child Benefit can now reapply for the money after the Chancellor raised the threshold in his last Budget.
Where only those who earned less than £50,000 could keep all their Child Benefit, while the money was gradually lost to those earning up to £60,000 before being withdrawn altogether, this has now changed so that those who earn £60,000 or less keep the whole of their child benefit, while those earning up to £80,000 keeping a proportion of it.
The salary threshold applies to the higher-earning member of a couple and finances are considered separately, so a couple earning £120,000 between them at £60,000 each would now keep their child benefit, which is worth £25.60 a week for your first child and £16.95 a week per additional child.
Expert tips on saving money as a family
Join a babysitting circle or set one up
Nights out can be expensive once you have children, says Kirsty Ketley, parenting specialist at kirstyketley.com.
A babysitting circle allows you to go out for free in exchange for babysitting for friends at other times.
Do a money MOT
Family expenses can add up without you realising it.
Go through every expense you have in a month to see where the money is going, says Holly Holland, founder of women’s money app Financielle.
‘The aim is to squeeze or optimise each one. Here you’ll see lingering subscriptions that are no longer needed or that you’re doubling up on – some current accounts or insurance deals include subscriptions and memberships.’
Try a toy library
Helen Dewdney, consumer expert at The Complaining Cow, says that these libraries are a great way to allow your children to try out pricey toys without buying them, cutting down on costs.
Bring down food costs by shopping intentionally
Taking down the cost of food will ease your budget. Maddy Alexander Grout, blogger at Mad About Money, says that batch cooking, meal planning and taking packed lunches and squash when you go out will all bring down the costs. She also advises you to leave the kids at home if possible when food shopping.
‘You will avoid the “Mum, can I have this?” pressure, and you will also be able to concentrate more on what you are spending, so you make conscious decisions on what you are buying.’
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2024-04-29T12:23:47Z dg43tfdfdgfd