The financial impact of having a baby is placing a significant burden on parents. According to new research by comparethemarket.com, new parents will spend £184 a week on necessities such as food, clothing, nappies and childcare for their baby, equating to £9,568 in the first year of parenthood. The cost of starting a family is a real concern for new parents. Of over 1,500 new and expectant parents surveyed, almost two thirds (65%) were worried about the cost of raising a child, with over a fifth (22%) considering themselves “very worried”.
The research also revealed that parents start to feel this financial pressure as soon as their baby arrives. Although 72% planned to take their full maternity or paternity leave, nearly two thirds (64%) are concerned that their maternity or paternity pay isn’t enough to cover the additional expense of having a baby.
The research suggests that parents are likely to spend £184* on their new-born every week, however the government’s Statutory Maternity Leave pays out just £139.58 a week for 33 weeks**, leaving parents with a weekly shortfall of £44.42, or £2,309.84 a year and this figure doesn’t even take into consideration the bills a family already faces, such as monthly mortgage and energy payments.
To further demonstrate the cost of raising a child, the £9,568 which the research estimates that new parents will spend on child costs in the first year of their baby’s life, equates to around a third (34%) of the UK average salary (£28,000).
What’s more, the cost of having a baby is also preventing parents from planning for their children’s future; in fact, over two thirds (67%) of parents worry about how they can save for this and one in ten (12%) do not think they will be able to put aside any money towards their child’s future.
Ahead of their baby’s arrival, living in a suitable home and having adequate savings in the bank to cover expenses, ranked as the most important factor amongst 80% and 59% of the respondents respectively. However, whilst almost four in ten (39%) believed that having a hospital bag ready was the most important thing to prepare, only just over a quarter (26%) of new and expectant parents stated that taking out life insurance was an important consideration.
Jody Coughlan, Head of Life Insurance, at comparethemarket.com, said: “The cost of living is increasing for many, but new parents are at the sharp end of this. When a baby arrives, parents have to buy items they have never budgeted for before, such as nappies, baby clothes and childcare – a challenge when parents will already be living off a reduced income. However, parents shouldn’t panic; there are many ways of keeping costs down. For example, switching to a cheaper supermarket while on maternity leave and using fewer branded items, or simply cutting down on the amount of petrol used, taking your new baby out for some long walks in the fresh air instead. All of these things can save vital pounds.
“What is more worrying is that so many parents don’t count life insurance as a necessity. For most parents, bringing up a child is more than enough to keep their days busy, but it is important to consider how your baby would be financially cared for if the worst should happen and also how debts and mortgages would be paid off. Life insurance provides peace of mind and certainty for parents that their loved ones will be protected should the unthinkable happen.”