08 June 2016

Discover the real cost of raising a child

If you’re expecting a child in 2016, you’ll need an average of £231,843 to support them until they’re 21, according to recent research by the Centre for Economics and Business Research (CEBR).

To put this in perspective, the average cost of a house (PDF) in the UK in February 2016 was £196,930.

Of course, the cost of raising a child varies depending on where you live in the UK:

Location Cost Location Cost
London £253,638 Scotland £230,988
South East £245,756 Wales £215,144
England £233,136 Northern Ireland £242,413

So what does that mean for your monthly finances? And, more importantly, when do you need to start saving?

A study of 1,000 UK parents with children under 18 published by Liverpool Victoria found that for one child the typical cost is £878. It’s worth bearing in mind that you may be eligible for Child Benefit or Child Tax Credit which can contribute something towards the total.

Where does all the money go?

Over £230,000 is a significant sum of money, so let’s take a look at where it gets spent in more detail:


  • Education: £74,430 (excludes private school fees but includes university fees school lunches, uniforms, equipment and trips)
  • Childcare and babysitting: £70,466
  • Food: £19,004
  • Holidays: £16,882
  • Other expenses: £14,195

Other things such as clothing, hobbies, toys and furniture make up the total.

When should you start saving?

When thinking about a new addition?

The first step to working out when to start putting money aside each month is looking at your finances. As well as seeing how things stand at the moment, you should also think about when your baby arrives. For example, will you/your partner be on a reduced income because of maternity pay? Will you both have the same income after maternity pay comes to an end?

Given the costs involved in raising a child, many couples start saving while they’re trying for a family so they have a head start before the pregnancy.

During the pregnancy or adoption?

Lots of couples start setting money aside once the pregnancy or adoption has been confirmed. Remember you don’t have to have the full £230,000 in the bank before the baby is born! Saving what you can during the pregnancy can help lessen the financial impact in the early months when you’re finding out what becoming a new parent (or revisiting the experience) is like.

When your child is growing up?

An important point to note is that children don’t cost the same amount to raise at all stages throughout their lives. The average yearly costs below will give you an idea of how much you might need to save as your little one grows up and makes their way through life.


  • First year: £11,498
  • Age 1 to 4: £15,806
  • Age 5 to 17: £8,640
  • Age 18 to 21: £17,815

Your finances are likely to change during the course of your child becoming an adult, so even if you haven’t saved anything before they’re born, you may have the opportunity to start later in life.

Your savings goals

Not everyone has the same financial circumstances or savings targets. Some couples will put money aside to help with costs as their children grow and others will save in a children’s savings account for when their offspring are older and more responsible.

Besides savings accounts, Junior ISAs and Fixed Rate Bonds are other popular options that you may want to find out more about.

Our online savings calculator is a quick and easy way to discover how much you need to save each month to reach your goal.

All good habits need you to take a first step, so why not find out how Nationwide could help you to kick-start your savings today? Many of our savings accounts can be opened with just a £1 deposit.

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