The cost of raising a child is now over £230,000 according to this year's research from LV=. Here's how you can discuss this with clients, writes Justin Harper.
Last week, we at LV= revealed the cost of raising a child to the age of 21 now stands at over £230,000 (£231,843 to be exact).
This varies across the UK, with Wales, and York and Humberside, coming in at around £215,000, compared to London where costs soared above the quarter of a million pound mark for the first time.
This means that, on average, it now costs more to raise a child than it does to buy a semi-detached house.
We found that parents can expect to pay £11,500 in the first year of a child's life, but the most expensive years are ages one to four.
Over these three years, parents spend £63,224 on raising their child - that's over £20,000 a year.
The two biggest costs for parents are childcare and education. Expensive childcare is nothing new.
Most parents know that babysitting costs add up and it's no surprise that so many turn to friends and family.
Our research found six in ten parents ask their friends and family to help with childcare, but nearly half say people are less available to pitch in than in previous years.
The cost of childcare now stands at £70,466, accounting for nearly a third of the total cost of raising a child, but this is still less than education.
Education costs parents around £75,000 over the 21 years, and this doesn't even include private school fees.
This is for the day to day costs associated with going to school, such as school trips, text books, and uniforms, as well as university fees.
Parents who want to send their child to a private day school can expect to add, on average, £141,863 to the overall cost of raising a child.
These numbers are staggering and it can be difficult for people to prepare financially.
In the same way that saving £200,000 or more to buy a house is way beyond the means of most people, it can also be hard to save the entire cost of raising a child.
However, unlike a house, you can't get a mortgage to cover the cost of children. This money has to come mainly from parents' earnings and in fact it takes up more than a third of the average UK household's net income.
For parents, or parents-to-be, this will obviously be alarming, particularly when six out of ten families say they struggle to make ends meet each month.
But worryingly less than half of parents have a plan in place if they lost their income, and only one in ten have income protection.
Losing an income suddenly - for example because of accident or illness - could have a devastating impact on the family, particularly when so much of this money is going on essentials like education and childcare for the kids.
One of the most common reasons that people don't take out income protection is they think they are immune to illness or injury.
The LV= Risk Reality Calculator can help you demonstrate to clients how likely it is they will be out of work for a period of time and a budget planner can also help them understand their household spend and appreciate why protection is important.
You can also share the hard-hitting, real stories from the 7Families initiative to aid your conversations about protection.
Another reason families might not take out protection is they think it's too expensive.
Consumers often overestimate the cost of insurance, so for some it might actually be surprisingly affordable, but if your client does have a limited budget, there are ways you can bring down the cost.
A budget income protection policy offering short-term protection at a significantly cheaper price than full cover, increased waiting periods on a policy and reducing the amount of time clients are protected for, are all relatively simple ways to help reduce the price.
Most parents never expect to suffer from illness or injury that stops them from working, but the reality is that it can happen to anyone, and at any time. With raising children now more expensive than ever, parents could really struggle if they find themselves unable to work.
By using LV='s Cost of a Child study to start conversations with parents about income protection, you can help them safeguard their family's finances long in to the future.
Justin Harper is head of intermediary marketing at LV=
