Fifth of income on raising children

cost of raising a child

cost of raising a childThe cost of raising a child up to the age of 11 has risen significantly in the past five years, with parents now forking out more than £90,000 on their offspring.

A study by Halifax suggests that the average annual cost of raising a pre-secondary school child in the UK has increased by £1,085 since 2007, up from £7,222 to £8,307 in 2011.

With Inflation - measured by the Retail Price Index - rising by 18% over the same period, it means parents are spending just under a fifth (18%) of their income on bringing up their child.

Where is your money going?

School equipment including things like uniform, class materials, lunches and trips, accounted for the largest increase in spending. The building society estimates that the total cost of schooling rose by 24% from £684 a year in 2007 to £849 in 2012.

Nursery and childminding costs represented the second largest increase, with expenditure growing by 22% to £3,346 in 2011.

This typically accounted for 40% of the total annual outlay incurred by parents when raising their offspring, while the nursery and childminding combined with schooling accounted for half of the total annual expenditure.

Spending on food and holidays fell in real terms with parents spending £889 feeding their children in 2011, an increase of 14% from £780 in 2007, while spending on children's holidays rose by 16% to £740 during the same period.

However, spending on children's clothing fell from £602 in 2007 to £513 in 2011. The report attributed this decline to "heavy discounting" among retailers to cope with the struggling economic climate.

Halifax economist Martin Ellis stated the 15% rise in the last five years has made the strain on household finances during the economic downturn far greater.

He said: "Childcare costs and education account for half, or £4,200, of the total annual cost of raising a child.

"This is a substantial sum for most households, so it pays to ensure sound financial planning when you are looking to start a family."

According to the report, annual growth in spending by parents on their children had slowed since the UK's "weak recovery" from the 2008-2009 recession to 3% in 2011, a fall in real terms as inflation grew by 5.2% between 2010 and 2011.