Legal News
Estimated costs to raise a first child by parents is less than half of what it would actually cost a report says (17 May 2012)
Date: 17/05/2012
The parents who are in the belief that to bring up their first child it would only cost just over £73,000 are in for a shock if HSBC’s reports is anything to be believed. It has stated that it would cost more than double of that £165,648.
The report has warned that families were underestimating the cost of passing major family milestones, with life-changing consequences.
Parents believe it will cost just over £73,000 to bring up their first child, but in reality they will have to pay out more than double that, £165,648.
And a wedding was also likely to cost a couple, £20,273 in comparison with an optimistic estimate of £8,365.
The bleak message set down in the report by HSBC warns that families who fail to face up to the actual cost of major life events are likely to be forced to delay getting married and starting a family.
It said that the 2,000 people surveyed on average underestimated the true cost of bringing up a family by just over £132,000, which was around five times the average worker’s annual pay.
A realistic estimate of major family events according to the report comes to £310,279, the report found.
HSBC’s head of savings, Bruno Genovese, said people had to be realistic about their budgets and, and start saving and planning their finances early, or some may have to delay these milestones.
The report found that high costs could be delaying couples from having children.
Childless people questioned said they intend to have their first baby at the age of 34, on average, two years later than in last year’s survey.
One of the most significant underestimates in the findings was university debt, which most reckoned to be £9,541.
In fact, with university fees set to reach £9,000 a year for many institutions this autumn, the true cost of university debt is likely to be around £43,500, the report said.
It also found that the cost of paying for big family events was 14 per cent higher than last year, largely because of the soaring cost of attending university and student debt.
It added that high inflation means the amount by which families are underestimating their costs is growing.