Is the Cost of Bringing Up Children Rising?

A survey has shown that a high number of parents in the UK are choosing to only have one child due to financial concerns. When parents of one child, who don’t plan to have a second, were asked why they wouldn’t, 58% said money was the main reason.

The financial crisis is not likely to have helped but it is not thought to be the main reason. This is thought to be a general rise in living costs, and in particular a rise in the costs of bringing up children.

But are costs really rising, or do people just want more than they did in previous times? It has been claimed that it costs between £210,000 and £270,000 for a family to bring up their first child. But is this really the case, or does this include unnecessary luxuries?

In many families both parents must work, as the income of one is not enough to support the entire family. This means child care is required, something that is expensive these days; an average of around £150 a week for each child. If one parent earns the minimum wage and pays for child care, they only have around £50 a week left after child care, tax and national insurance. And if the other parent also earns the minimum wage they would only have £250 a week left, or just over £1,000 a month. Most of this could be for rent or a mortgage alone. This shows how less well-off families can struggle, even if both parents are working full-time.

Although house prices have fallen a little during the financial crisis, they are still very high compared to historical prices, a trend that is likely to continue long-term. So for families not yet on the housing ladder, but who would like to be, it can be a struggle. This will also be the case if a couple would like more children, and would need a bigger home to do so. Food and petrol are also rising costs, as are utilities.

The cost of education is something that has been in the news a lot recently. Education up to, and including, A-levels is free but there are costs involved, such as school trips and uniforms. Then there is the much debated university, the cost of which will be rising dramatically. This has been one of the reasons cited for parents not choosing to have more children. However, due to the loan system – whereby students borrow the money and pay it back gradually as they earn more – parent won’t actually have to foot the bill. The truth is that, while many parents would like to help fund higher education, it is not the necessity that many believe. Part of the studies looking at how much it costs to bring a child up considered private education, something that could be described as something of a luxury.

Another rising cost that some have mentioned as a reason for the increasing costs of bringing up children is that items children want, from toys and games consoles to branded clothing, cost more. Some parents have even said that their children demand branded clothing. This though, is still a choice, not a necessity like food or accommodation. Luxury holidays have also been mentioned, something that is also unessential. Looking back 50 years (when the average family was larger) it was rare for people to go abroad for a holiday every year.

Many parents want to help children prepare financially for their future’s, for example by paying regularly into a children’s savings account. Some would argue that this is more difficult now, but again it could be seen as more of a luxury for those who can afford to than a necessity.

In many ways it is difficult to judge the cost of bringing up children, and whether or not it is rising. Some of the rising costs mentioned above are unavoidable, such as food, child care (if both parents are working) and petrol or public transport. Others are less so, but maybe something people are less prepared to go without than they used to be. Compared to 70, 50, or even 20 years ago people are comparably better off, but that doesn’t mean the cost of bringing up children hasn’t risen. Plus, there could be a trend for parents preferring to do everything they can for one child instead of having to be more careful with money and have two.

Andrew Marshall (c)