Childcare costs continue to rise
Parents are paying as much as £8,684 a year for a full-time nursery place, with those in London facing the biggest cost.
The figures, from the Daycare Trust, show that the cost of sending a child to nursery has increased by up to 5% in the past year, with a typical nursery place likely to set you back £8,684 a year in England, £8,216 in Scotland and £7,592 in Wales.
Meanwhile, other research from insurer LV= shows the cost of raising a child has increased by 38% over the past five years, with parents forking out as much as £193,772 on raising a child up to the age of 21. This is equivalent to £9,227 a year or £25 a day.
The friendly society says childcare and education remain the biggest expenditures, costing parents £53,818 and £50,240 respectively.
Mike Rogers, group chief executive of LV=, says: "Every parent knows how their hard-earned savings can dip thanks to eye-watering education and childcare costs."
The sharp rise in the cost of kids and the economic downturn has prompted 81% of parents to cut back on family expenditure, with holidays and other leisure activities the first to go out the window.
Food shops have also come under the money-saving spotlight, with 79% of parents admitting they now buy lower cost items and supermarket 'value' items. Second-hand clothes and furniture have also risen in popularity.
A worrying trend picked up in the LV= research is that savings and financial security are also under pressure, with 37% of parents cutting the amount they save regularly and 23% cancelling or reviewing their life insurance and income protection cover.
Rogers says: "Although parents are feeling the pressure financially, it is important they try to look beyond the short to medium-term money worries.”
Generally thought of as being interchangeable with life assurance, but isn’t. Life insurance insures you for a specific period of time, at a premium fixed by your age, health and the amount the life is insured for. If you die while the policy is in force, the insurance company pays the claim. However, if you survive to the end of the term or cease paying the premiums, the policy is finished and has no remaining value whatsoever as it only has any value if you have a claim. For this reason, life insurance is much cheaper than life assurance (also called whole of life).