Couples thinking twice before having more children
Post by Karl Phillips
on 22 February 2011 in Family & Finance
Higher living costs are causing British families to delay having more children, according to new research.
A survey carried out by insurance firm Aviva found that some parents now spend, on average, in excess of £1,000 a month bringing up a child. Over a 21-year period that amounts to more than £270,000.
As a result, the survey found 66 per cent of respondents couldn’t afford to have more children even if they wanted to. Out of parents with just one child who took part in the survey, 58 per cent said they were not planning to have any more.
Establishing a savings plan and working out a family budget
as early as possible is clearly sensible. Ben Smaje, managing director of Kennedy Black Wealth Management, told the Financial Times that one of the first questions parents need to ask when it comes to investing for their child’s future is “how much am I looking to contribute?”.
Payments into The Child Trust Fund are capped at £100 per month, but that would still amount to a lump sum of £27,000 on the child’s 18th birthday, allowing for growth of 3 per cent over inflation and annual costs of 1.5 per cent.
Another question parents need to consider is how the cash will be spent. Many are likely to want it to go on university fees or a gap year rather than a brand new car.