Business

Parental warning: your kids will cost you a (large) fortune

The cost of raising a child in Northern Ireland from birth to age 21 is £242,413 according to insurer LV=

IF you have children, especially ones about to enter third-level education, this article is essential reading. If you aren't a parent, but are planning to be, and are of a sensitive disposition, then this article may well scare the living daylights out of you and might look away now . . .

Around a year ago, the insurer LV= published a study entitled 'Cost of a Child, 2016' compiled by the Centre for Economics and Business Research (CEBR) in London.

The report showed that the cost of raising a child in Northern Ireland from birth to age 21 is £242,413.

It also showed that Northern Ireland is the most expensive location in the UK to bring up a child, with our figure well ahead of the UK average of just under £232,000.

In fact, the cost of raising a child here is around £9,000 more than in England, £12,000 more than Scotland, and £27,000 more than Wales.

I don't want to put anybody off starting a family - but you should know what you're letting yourself in for.

We reported on the LV= study in this column at the time. I mention it again, only because now my good friends at Scottish Widows have come up with some current information on one specific aspect of this process of child-rearing: the financial cost of helping to kick-start her or his career.

The figures in their report 'The Future of Employment' are worth noting, particularly if you have a young child or children and would like to plan ahead to assist them with their future.

According to the Scottish Widows think-tank, the Centre for the Modern Family, the average UK family will spend on average £17,400 to help our children towards that elusive first job.

Taking the average number of children in the families that participated in the report, this works out at £7,900 per child.

As parents, 67 per cent of us believe that we owe it to our children to give them some financial support on their way towards the workplace, and nearly 80 per cent of us feel that we should offer them ‘practical' help.

With the considerable financial burden that this entails, it is not surprising that a quarter of parents believe that the government should help by pitching in financially as well.

At the job application stage, almost half (48 per cent) of parents rig their child out in a new suit or smart clothing to wear to job interviews. Nearly a quarter of us (23 per cent) pay for additional training courses to enable our offspring to compete for a position, and 17 per cent of us have helped our child with student loans.

Those of us with a third-level or university child contribute, on average, over £6,000 in tuition fees, and a further £5,000 towards the cost of accommodation, during the course of their studies.

We do this out of a sense of responsibility, but the fact is that nearly a quarter of us (23 per cent) worry that the qualification our child is working towards will not be valuable in the workplace.

With youth unemployment in the UK currently standing at around 591,000, competition for available positions could best be described as cut-throat. No wonder that four out of 10 of us worry that our children will struggle to find work in the future.

If these numbers have convinced you that assisting your child to get a first foot on the employment ladder will be a considerable challenge, then perhaps you will agree that now would be the time to plan ahead, and start putting money aside for that.

With advice from a qualified, independent financial adviser, you can design a comprehensive, tax-efficient savings strategy today that can take the sting out of funding your child's education and job-seeking campaign, when the time eventually comes.

:: Michael Kennedy is an independent financial adviser and pensions specialist, and can be contacted on 028 71886005

Enjoy reading the Irish News?

Subscribe now to get full access

Business
Irish News