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Along with impacting our everyday spending, rising inflation rates will no doubt influence our bigger life decisions
We’re all feeling the squeeze of the rising prices of petrol, food and household bills this year (making many of us more determined bargain hunters than ever). With inflation rates hitting record highs in recent months, the cost of living has become a nationwide crisis.
Inflation reached 6.2% in March, the highest rate the UK has seen in three decades. The Bank of England has predicted that this month it could rise even further, to 8%.
It’s no surprise then that the cost of raising a child from birth to 18 is also the highest it’s ever been, according to new data from investment firm Moneyfarm. The firm estimates that parents could now face spending up to £320,000 on a child, the same cost as a three-bedroom house in the Cotswolds.
Moneyfarm’s research suggests that even if families spend below the average on key items like food, clothes and childcare, the cost of raising a child totals a minimum of £131,000. Browsing Rightmove, you can find two bedroom flats in areas like Newcastle, Cardiff and Birmingham for this sum.
Meanwhile, if parents spend exactly the average on everyday necessities for their child they can expect the total to reach £202,000.
“Of all the major milestones in life, starting a family is arguably the most impactful,” Chris Rudden, Head of UK Investment Consultants at Moneyfarm told the MailOnline. “It’s a commitment that no one takes lightly – financial, social and professional priorities all have to shift.’
The data shows that the costs to parents will vary across a child’s life, with the most expensive phase happening between the ages of 15 and 18. These teenage years could total an average of £49,790. The next most expensive phase happens when a child is between six and eight, with those two years costing an average of £30,000.
The current surge in prices will be having the biggest impact on low income families. “We know things will only get harder and many already have nothing left to cut back on,” Sara Ogilvie, director of policy, rights and advocacy at Child Poverty Action Group, told the MailOnline. “With 3.9 million children living in poverty, low income families urgently need universal credit to rise with inflation.”
She continued: “Now’s the time for the government to reflect on the erosion of child benefit, recognising all families need extra support.”
Even those on average incomes are feeling priced out of starting a family. One of the most common reasons people are choosing not to have children is that it is too expensive, a recent YouGov poll revealed. With the cost of living showing no signs of abating, perhaps we’ll see more people coming to the same conclusion.