Cash-strapped parents warned not to cut vital protection cover as household budgets feel the pinch

Parents look to make whatever savings they can as cost of raising child rises 3.3%
Cash-strapped parents are being warned that cutting back on the amount they spend on vital protection cover may help household budgets in the short-term but could have “catastrophic” implications overall.
Research published this week shows that the rising cost of childcare, education and food means that the overall cost of raising a child has increased 3.3% in a year. As a result, over three-quarters of parents are making cutbacks to the family budget, while two in five parents have reduced the amount they regularly save.
The rising costs are thought to be behind the fact that only a third (32%) of parents have life cover in place.
The annual Cost a Child Report from protection and retirement specialist LV= shows the cost of raising a child from birth to their 21 birthday now totals a record £218,024. This equates to £10,382 a year, £865 a month or £28.44 a day.
The survey of more than 2,000 parents suggests that while costs of childcare and education have gone up, some expenditure has decreased since last year as three-quarters of parents (76%) look at ways to cut back, with spending on hobbies and toys down 5%.
Mark Jones, head of protection at LV=, said that while many parents are seeking out “savvy” ways to ensure they can still afford their children’s higher education prospects, with tuition fees increasing this year he expects to see more parents making “significant” cut backs across the family budget to accommodate this.
But he said that with mounting financial pressures, many families are reducing the amount of savings and protection they have in place. Two in five (43%) parents trying to decrease their spending have cut back on saving and reduced the amount they are putting away. A further 22% have cancelled or reviewed their insurance policies to try and save money.
Jones said that when considering ways to ease the family budget it is important that parents keep in mind the long-term picture.
“Cancelling life cover or income protection, for instance, as a short-term measure to save money can have catastrophic implications if either parent were unable to work or weren’t around in the future,” he said.

Free on advice on income protection