As the cost of inflation goes up all around the world, families have it rough today more than ever. In the UK, particularly, the situation is no better.  According to studies carried out in the UK, parents are increasingly paying more each year to raise their families. New parents often find themselves struggling financially as they try to figure out the jaw dropping costs associated with raising a family.

What Do Families Spend On?

Family spending across the UK is at an all-time high, but London families have it tougher. On average, a family living in London will spend about £120 every week on fuel and housing alone, which is twice the amount Northern Ireland families spend on the same. Being the most expensive city to live in globally, London families spend about £250 more than other UK families on a weekly basis.

The overall UK family expenditure is about £600 every week. A bulk of these expenses is on transport and housing. Here’s a quick snapshot of the average UK Family expenditure.

Item Amount (%)
Transport 14
Housing, power, fuel 14
Other costs 14
Recreation and culture 13
Food and non-alcoholic drinks 11
Restaurants and hotels 9
Household goods and services 7
Miscellaneous goods and services 7
Clothing and footwear 4
Communication 3
Alcohol, narcotics, tobacco 2
Education 1
Health 1

The above table is a rough draft of a typical UK family budget. The costs of housing and fuel take up the biggest chunk of the family income. London has the most expensive transport systems, despite the Oyster Card, which is no wonder that transport takes a good part of the family income. Food is also quite expensive, bearing in mind that the family will occasionally eat out in addition to the regular grocery shopping.

There are many expenses that a UK family worries about. Putting together a simple budget is a step towards managing expenses and ensuring that all bills are paid as required. Keep in mind that once a family gets children, the budget must be readjusted accordingly. The bulk of family expenses shift to child care.

How Much Do You Need To Raise a Child in the UK?

Did you know that you need up to £300 a month to spend on the baby alone? And that is just for the essentials; according to a new study. While the bill of food, clothes, transport and other vital expenses average £4,000 a year, parents have to cough up at least £70,000 on the minimum, by the time the child clocks 18 years. London is the most expensive city to bring up a child in, while Midlands and Wales are the cheapest, according to a study done by Santander Insurance.

A study by Halifax emphasizes the costs of raising children, with the findings showing that the average costs of raising a child has gone up over the years. With the inflation up by 18% according to the Retail Price Index, parents are spending about a fifth of their income solely on children.

The most expensive years of a child are up to 4 years, where the parent spends close to £65,000. As the child grows older, the costs go up as well.

Education is one of the most costly elements of raising a child; with the average minimum figure being about £75,000 up until the child is 21 year. This figure excludes private school fees. This amount, however, does include school uniforms, learning equipment, lunches, school trips and university costs.

If you would like your child to have private school education, you will be required to spend about £142,000 for a day school and £261,000 for a boarding school.

Apart from education, child care and babysitting costs will take up the second largest chunk of your income. These costs have gone up to about £70,000. The costs associated with food (and all its amenities) will cost you a further £70,000 by the time your child grows to be 21 years.

Child Care Costs – brief snapshot of the change that has occurred over the years

Budget Item 2016 (£) 2003 (£)
General childcare 70,500 39,600
Basic public education 74,400 32,600
Food and drinks 19,000 14,900
Clothing items 10,900 11,400
Vacations 16,900 11,500
Toys and hobbies 9,300 8,800
Recreation and leisure 7,500 6,400
Pocket cash 4,600 3,400
Furniture 3,400 2,100
Personal expenses 1,100 900
Miscellaneous (gifts, driving lessons etc.) 14,200 8,900

According to LV= Managing Director, Myles Rix, the child care price tag keeps rising, which further stretches the already strained family income. Over the years, the study shows, the costs have increased with jaw-dropping percentages.

Unforeseen circumstances such as an accident or illness can have a huge impact on family finances. Therefore, parents are advised to put in measures to guard against loss of income by taking up insurance. If you cannot afford the insurance, it is time to familiarize with government benefits available to you in case you lose your job.

What To Do When You Lose Your Job

With the rising costs of raising a family in the UK today, a job loss is nothing but stress. Losing your job means that there is less money available to adequately take care of the family. This can be an undeniable source of stress as bills pile up. How do you get yourself out of it and take care of your family? Well, for starters, consider government benefits.

Government Tax Credits and Other Benefits for Unemployed Parents

There is a range of benefits and tax credits available to parents who need assistance with family expenses after losing a job. In order to know whether you qualify, how much, and how to claim, check out the official government website. In the meantime, here is a brief of the benefits you can get.

Housing Allowance or Housing Benefits

Housing costs takes up a pretty big chunk of the family income. Housing allowance is given to parents who have trouble paying rent or mortgage after a job loss. The benefit may cover your rent, mortgage repayments as well as mortgage interest payments.

Job Seekers Allowance

JSA is available to anyone who is looking for a job. The purpose of Job Seekers Allowance is to help with the expenses until you get meaningful employment. Those eligible for JSA can also get additional assistance such as help with mortgage or rent as well as other tax credits.

Universal Credit

This benefit is slowly phasing out JSA. It is a single monthly payment that can be used to cover such costs as housing, childcare, and general family expenses. The amount of Universal Credit you get will depend on a range of factors. Be sure to learn more on our universal credit section.

Statutory Redundancy Pay

If your employment position has been rendered redundant, you are entitled to statutory redundancy pay. This applies if you have been working for your employer for a minimum of 2 years. The redundancy pay should help you make ends meet until you find another income source.

Tax Credits

You can access some tax credits to help with the costs of raising your kids. For starters, the combined family income should be up to a certain amount in order to qualify. Tax credits are payable weekly or monthly depending on your preferences.

Welfare and Education Grants

Education takes up quite a big chunk of the budget allocated to childcare. As such, after a job loss, you may want to check out how these grants can sort out the children’s education even as you work towards getting a job. You can get these benefits from charity organizations. Funding your child when they go to university has a large cost implication, but help is available from student finance.

Welfare Benefits for Single Parents

Let’s face it; single parent families face tougher times compared to other homes. The resources are limited yet the expenses are as high as can be. If unemployed or on low income, a single parent can access a range of welfare benefits for lone parents to help with the cost of raining the family.

How to Get Back On Your Feet After Losing a Job

Job loss is not the end of the world; you can still get countless other opportunities. Do you need any assistance getting a job? Well, contact your local Jobcentre Plus office. Here are a few advantages of working with your local Jobcentre Plus officer to help with your situation.

  • You get recruitment advice and specialist support if you have business interests
  • You will get access to an updated database of full/part time vacancies all over the UK
  • You will get assistance in polishing up your resume and presentation skills
  • You will get tips on how to prepare for interviews and contract negotiations

Remember…

Empty pockets and past-due bills open your mind to a whole word of possibilities. It is after you lose your job that you will actively look out for opportunities to make that extra coin to assist with family expenditure.

Information on benefits, tax credits and rebates, grants as well as short-term insurance payments should be at your finger-tips. Every extra penny you get from any of these sources comes in handy. It takes the pressure to provide off your shoulders so that you can focus on getting a new job!

Do you need assistance with accessing government benefits and tax credits? Talk to us to day and we will get you the assistance you need.

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