Currently in the UK it can cost up to £229,251 to raise a child from birth through to the age of 21. This figure has increased by 63% since 2003, at nearly twice the rate of annual inflation over the last 12 years.
Figures collected by Liverpool Victoria have revealed that parents now spend nearly a third of their gross annual income on raising a child; spending less money on food, hobbies and toys for their children and more on education and childcare, due to their increase in cost. Liverpool Victoria’s ‘Cost of a Child’ report has revealed that education and childcare, for example, nurseries and babysitters, cover 62% of the amount it costs to raise a child, which amounts to £141,905!!
If you have a young family, one of the main priorities when it comes to managing your finances is probably childcare. Like most family’s who have young children you need to be able to afford to pay your child-minder, babysitter or nursery costs, if you are in need of childcare. The cost of childcare varies across the UK, but on average you can expect to pay up to £67,586 on childcare alone. Unsurprisingly, the area where parents pay the highest average amount for childcare is in London; where you can pay an average of £81,276 over the course of your child’s life. Yorkshire & Humberside pay the least with an average of £61,397.
Everyone knows how expensive education is these days, with the cost of school equipment, school uniforms, PE Kits, school trips etc. but do you know how much it truly costs? The average cost to give your child an education (including University) is £73,803, which is a 126.4% increase since 2003.
Now that it has been put into figures what would you do if you lost your source of income? How would you pay for your child care? How would you afford to give your child an education to stabilise their future? This is the importance of having financial protection, should the worst ever happen and you found yourself not being able to pay for the day-to-day essentials for you and your family a financial ‘back up’ could be your life saviour.
One way that you can protect you and your family financially is through applying for insurance, such as Income Protection. Insurance is in place to provide you with a lump sum if for some reason you need extra money coming in. However, this can depend on what insurance you have in place. For example, if you have:
• Income Protection Cover then your insurance you will receive regular payments to replace your income if for some reason you are unable to work.
• Mortgage protection Cover is in place to help you pay off your mortgage in the event of critical illness or death.
• Life insurance and Critical illness Cover can be taken out separately or together. They could pay out if you die (Life Insurance) or if you are diagnosed with a critical illness (Critical Illness). However, it is important to keep in mind that not all Critical Illnesses are covered.
James Barker, Company Director of ProAdvice, would like to advise anyone reading this blog posting that “Protecting yourself financially is one of the most important steps you can take in protecting you and your family in a time of crisis. You can do this in a number of different ways, either through Income Protection, Mortgage Protection or Life and Critical Illness insurance, or any combination of these policies. Any of these will provide you and your family with a cushion to fall back on if the worst was to happen and you had one less income coming in.”
If you are looking to apply for insurance or even looking for a quote, please don’t delay give ProAdvice a call on 01933 417300 today.