Can you afford a family?

Children are expensive.

How expensive will depend on your lifestyle, but according to recent research published in The Times, the average cost of raising a child up the age of 18 is £202,660 in the UK. That’s around £11,250 a year, or £938 a month. This figure is not cut and dried, of course. It includes a share of your housing costs as well as childcare expenses and will be affected by your generosity at Christmas and birthdays – but the fact remains that having a child will eat into your budget. Having more than one might not multiply the base figure – there is only so much a child can eat, and toys and bedrooms can be shared – but it will certainly drive it higher.

The costs of housing and of childcare, and the skyrocketing cost of general living are putting individuals and couples’ budgets under increasing strain, even before they start thinking about a family.

The simple fact is that high costs are preventing some people from having the family they wanted.

Putting off having children

Having a family is not only a basic instinct, it is the main reason the human race is here in the first place.  But now, the costs mean that would-be parents are delaying having children. The average age at which a British woman has her first child has risen from 26.5 years old in 2000 to 29.1 in 2020. Postponement can easily slip into permanence, and even those who already have a child are putting off having a second or third.

Surveys indicate most people want two or three children but end up, on average, with one or two. It is even becoming a problem for the nation. As many families delay having children later and later, the national birth rate falls. The fertility rate is now 1.61 children per woman, compared to 1.94 a decade ago.

The population remains on course to grow at the moment. It stands at around 67 million now and is set to reach 71 million by in the 2040s. After that is it set to fall, and current projections suggest 57 million Brits by 2100 – a level last seen in 1989.

A falling birth rate might be good for the environment, but it brings all sorts of painful economic consequences. Anyone anticipating a stable state pension in future risks finding a shortage of younger taxpayers to fund it. Pressure on the health service will mount as an older population finds fewer resources to draw on for their care.

But what about your own family prospects?

What can you do to make a family affordable?

Parents’ incomes have struggled to keep up with soaring housing and childcare costs. Children make a larger home essential, while affordable childcare is vital if both parents need to work to bring in sufficient income.

You also need to ensure financial security for a future that could be financially challenging, as well as essentially unknowable.

The solution as always may be to get some expert help. At Continuum we can’t provide day care for your offspring, but we can provide the help you need with your finances.

Your first priority may be to secure an affordable home. Mortgage rates are rising, but by acting now it may be possible to lock in a deal before they go any higher – a deal which could help you secure the home you want with sufficient space for a growing family. 

It is possible to lock in a mortgage rate for 10 years or even more.

We can also help you arrange the financial security your family will need. Life insurance for you and your partner, and at cover designed to provide an income, even if accident, illness or unemployment meant you were unable to provide it yourself.

Finally, we can help you look at all your finances, to help you budget for a future which is likely to be more challenging but significantly more rewarding – because it will have your children in it.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice, you should seek independent financial advice before embarking on any course of action.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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