It’s widely known that raising children is costly, but today figures have been released stating exactly how costly it can be. The Halifax report found that parents spend a staggering £87,000* when raising a child from birth to the age of eleven. Childcare is the most expensive cost, with parents spending £3,840 a year on average for childcare. There are many factors involved in raising children, including food and leisure costs. Nevertheless, childcare is the most substantial cost, this puts into perspective how costly it is for parents.
In addition, childcare costs have risen by 3% since last year, becoming more of a strain for working parents. The research also finds that costs for younger children are considerably more than children aged nine and above. In the first year of raising a child, costs can amount to an excessive £10,000 or £820 a month! These extra costs in the early years add to the already huge pressure on parents who are readjusting back at work. Even though childcare costs decrease as children grow older, parents still spend an average of £520 a month in total for children aged nine to eleven.
Giles Martin, head of Halifax Savings, said: “For many parents, the first 12 months of parenthood can be frantic and as our research shows; often the most expensive. Having children is a huge commitment, both financially and emotionally.” “With unexpected costs along the way for the majority of families, it is important to be realistic about how much things are going to cost and how much can be saved to meet the future needs of a growing family.”
It is not all doom and gloom; the HMRC approved Childcare Voucher schemes can help working parents save money on their childcare costs. Childcare Vouchers are operated through a salary sacrifice scheme, where a portion of the employee’s salary is deducted from the childcare vouchers. The savings are created because the sacrificed amount is non-taxable and exempt from National Insurance contributions.
The scheme can save working parents an astounding £933 per year on childcare! Both parents can join their employer’s Childcare Voucher scheme, increasing savings. In addition, Childcare Vouchers can be used to pay for registered childcare for children up to the age of 16 (the first week of September following the child’s 15th birthday). Childcare Vouchers can be claimed by a working partner as soon as the child is born, even when, for example, the mother is on maternity leave. This gives families the opportunity to save up vouchers to make childcare more affordable when they do need it. The Government are launching their new Tax-free Childcare scheme in 2017; therefore, Childcare Vouchers are the only option for working parents to save on their childcare until 2017.
Busy Bees Benefits deliver a renowned childcare voucher scheme which employers can offer at no cost to the organisation. Parents can also receive an additional discount if they use a Busy Bees Voucher at a Busy Bees Nursery. If you would like further information please call us on 0330 333 9100 or visit www.busybeesbenefits.com.