Children: like all the other best things in life, they’re far from free

There’s no getting away from it: to bring up a child in the UK costs every parent, on average, at least £46 a week. Assuming a child is absolutely dependent for support on his or her parents until the age of 18, then the total bill will be £43,056. If however, education-related costs are included in the equation, then mum and dad could end up forking out as much as £150,000.

Children and where the money goes

As you may have guessed, especially if you have first hand experience, it’s the food bills that eat up almost half of the weekly £46 cost; keeping a child fed and watered means spending £22 a week in the supermarket. Next on the list comes clothing and ‘entertainment’ – i.e., toys and the occasional outing, both of which account for a further £7 a week each. Should you decide that a little bit of Extra Curricular Tuition might be in order, then you’ll have to find a further £7 a week. And what would like be without pocket money? Across the board, pocket money in the UK averages £5 a week, although one in ten children receive £10 a week or more and about half of children receive none at all. School-related costs such as uniforms, travel, school trips and the like, cost a further £3 a week. So forgetting for the moment help with buying the first car, or paying for a wedding, that’s where the money goes for each and every family with children under 18 years of age. But of course £46 a week is only an average figure and excludes any provision for funding private education, or indeed help with university costs…and that in financial terms is when going really gets tough…

The early years - ages 2 -11

Working mothers have four choices – nursery school, a child minder, nanny or preparatory school. According to a Daycare Trust survey, a full time nursery place for a child under two years of age in England costs £7,900 a year on average; if the parents live in London the cost rises to £10,500+ a year. The same survey also shows that employing a childminder will cost on average £7,200+ a year. Or what about a nanny? In the 2005 Nannytax Survey, the average salary for a live-in nanny in the UK (excluding outer London & Home Counties) was £13,000 a year. The average termly fees for the fourth and final option - preparatory schooling – are £2,707 on a non-boarding basis and £6,712 on a full boarding basis.

GCSE’s and beyond – ages 11-18

For parents, this is usually the most expensive period of a child’s education. The child may be at school for up to seven years (the equivalent of 21 terms) and during that time will be totally dependent financially on his or her parents. Research from The Independent Schools Council, which represents 128 independent schools, reveals the following statistics for 2006/2007:

The average termly day fee at a day school: £2,707
The average termly day fee at a boarding school: £3,715
The average termly boarding fee at a day school: £6,712

On top of these costs are of course the costs of uniforms, travel expenses for the parents and the child and pocket money or allowances.

University – ages 18 – 21

At this stage, the financial pressure on parents should – but not always - begin to ease slightly. Studies allowing, the child might be in a position to take on some form of paid and part time employment. Research undertaken by the National Union of Students showed the average student’s total day-to-day living expenses for the 2005/2006 39-week academic year to be as follows:

Outside London - £7,033
Inside London -£8,338

Tuition fees have of course to be added these figures, which for students starting a course from September 2007 onwards, could amount to as much as £3,070 a year. Even taking the tuition fee loans into account, the NUS’ research shows that the typical university student outside of London has to find at least £5,664 (£6,612 for students inside London) every year for three years or more.

Finding the wherewithal

For all parents, the every day costs of bringing up a child are simply a fact of life and something to be got on with. When it come to funding the costs of private education out of earned and taxed income then that’s usually a different story. One of the ways to ease the pressure in that respect is to invest on a long term basis with a view to building up a substantial capital sum which can help pay for some or all of the costs of schooling. Ideally, the parents and other members of the family should start an investment programme to pay for education as soon as the child is born. If your intention is to pay for your child’s secondary education i.e., for up to seven years from age 11 to 18, then your investment should really be equity-based. The reason being, that the stockmarket has always produced greater returns over the long term, than other popular securities such as bonds, gilts and deposit accounts. Nevertheless, all stockmarket-based investments need time to grow - at least five years – and ideally 10 years. So starting sooner rather than later is what it’s all about and, given a fair wind coupled with a little luck, it should be much easier to cover the costs of bringing up and educating a child.