The cost of raising a child from newborn to the age of 21 has risen to a whopping £230,000 – more than the price of an average semi-detached house in Britain, according to new research.
The figure, which is calculated based on a child attending state school, marks a rise of 65% since 2003 when analysts from the Centre for Economics and Business Research first calculated cost figures for parenthood and shows just how unaffordable raising a child has become for the average UK family.
One of the most significant expenses involved is childcare.
One of the most significant expenses identified by the study alongside education is childcare, with parents spending more than £70,000 on childcare and babysitting alone over the years.
According to Iain McMath, CEO of Sodexo Benefits and Rewards Service, a leading provider of childcare vouchers in the UK, “Whilst most headlines have focused on the shocking fact that raising a child now costs more than the average semi-detached house, very few have highlighted the fact that one of the most significant expenses involved is childcare, which now accounts for almost a third of this total. This is a situation that threatens not only household budgets, but also the wider economy, since it actively discourages many parents from working outside the home.”
To help working parents, the government has been looking into new ways to help subsidise the cost of childcare. 30 hours of free childcare will be piloted from September 2016 and Tax-Free Childcare (TFC) is expected to launch in early 2017.
The existing Childcare Voucher scheme can currently save each parent up to £933 per year.
However, even though TFC claims to save parents up to £2,000 per year, in reality the average saving has been estimated at just £600.
For parents that need right help now, the existing Childcare Voucher scheme can currently save each parent up to £933 per year, contributing £1,866 to a family when both parents are working – this can equate to a possible joint saving of more than £25,000 over the 15 year duration of the scheme.
The existing scheme will be closed to new entrants from early 2017, so parents looking for help with their staggering childcare costs should sign up now.