Baby on the way – are your existing plans sufficient?
Top things to consider when your baby is on the way!
Having children is one of the most amazing gifts that will happen in your lifetime, but it does come with its price!
Parents spend up to £35,000 on their children until their 5th birthday
Did you know that parents spend up to £35,000 on their children by the time they reach their fifth birthday according to research by Aviva. Also parents on average spend £7,026 a year, or £586 a month on essentials and extravagances for their children.
Parents also feel under pressure to spend on their youngsters. One in five say they feel obliged to spend in order to keep up with other parents. However only one in seven admit to giving in to their children’s demands and spending on things they don’t really need.
52% of parents have opened a savings account for their children
Only 52% of parents have opened a savings accounts in their children’s names, while only 37% have opened a Junior ISA or Child Trust Fund. But there’s good news as well. Up to 42% of parents of 0 – 5s have planned for the unexpected by taking out life insurance.
The cost of raising children to the age of five also ranges differently across the UK. With parents in London spending an average of £894 per month or £10,732 a year on their children compared to a more modest amount of £408 a month or £4,901 annually in Wales.
Start a savings account for just £1
Also you can start a saving account with as little as £1 and did you know that recent research shows that, on average, parents in the UK are putting aside £42.45 a month for each child. (source L&G Investments) There are other options for saving such as Junior ISAs. These work just like savings accounts but with an added benefit, they are tax free, which means that you won’t owe the taxman anything from your interest or fund growth.
The Government via NS&I also provide Children’s Bonds, whereby the child owns the bonds, but only a parent, guardian or (great) grandparent can purchase them. The parent or guardian holds them until the child is 16. These are sold in batches known as issues that run for five years each and each issue has its own fixed interest rate with the interest added at the end of each year.
*Research figures by Aviva 2017 unless stated
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This article – Baby on the way – are your existing plans sufficient? was originally published on 19 April 2017
The value of investments can fall as well as rise and past performance is not a guide to the future. The content of this publication is for information only. It does not represent personal advice or a personal recommendation, and should not be interpreted as such. Please do not act upon any part of it without first having consulted an Independent Financial Advisor’