The Financial Life Milestones Parents Need to Consider
According to a report in the Guardian, it’s estimated to cost a total of £231,843 to raise a child born in 2016 up to the age of 21. Whether you’re a new parent or have children of adult ages, you will want to give them a financial helping hand for life’s big moments. At gpfm, we’re experienced in helping families achieve their milestones with practical financial advice.
Childcare, education and university fees
The figure above reflects children who go to state school, and this rises to over £373,000 for children who go to private day school, increasing further to £500,000 if the child goes to a boarding school.
When thinking of your child’s university education, this is a fantastic milestone moment filling parents with pride, but this also comes at a cost.
Tuition fees are currently up to £9,250 per year. If your child studies for the average length of three years at university, the full total is £27,750, not accounting for inflation. These figures don’t include living expenses such as rent, food, clothing etc.
With these statistics, it’s worthwhile planning as much of your children’s financial care as possible. Speaking to a financial planner can help you with projected costs of nannies, private school, university etc. and strategise a long-term plan for saving.
18th or 21st birthday and the promise of a car
Special birthdays like the 18th and 21st are often celebrated by a big present or grand gesture from the parents and family. A savings account complete with funds, a car or big holiday are all favourite choices.
Cars, in particular, are a popular ‘big birthday’ present with the average price of a young person’s first car reaching to £6,800 in 2015. This is not accounting for insurance which for an under 21 driver ranges between £250 – £400 annually. Add this to the cost of an average car for young drivers and you’re looking to spend at least £7,050.
Your child getting their first home is a big step – both emotionally and financially. It could well be the most expensive purchase of their lives. The data speaks for itself: In England, the average house price in South East England was £271,655 (first quarter 2017), whilst the average price of a house in London was £478,782 (first quarter 2017).
This means that a typical first-time buyer deposit for an average home in the South East would be £13,583. You may want to discuss how to plan to save towards the deposit with one of gpfm’s Chartered financial planners. Perhaps you’ve agreed to help your child with their deposit and go halves, or are gifting the entire sum of the deposit.
Don’t forget additional costs such as surveys, conveyance charges and stamp duty. It’s wise to factor these overhead charges into your savings plan.
The average cost of a wedding in the UK is now £27,000. In London, this increases to a substantial £38,666. Weddings are often a couple’s most significant expenditure after buying a home. Planning a way to save for the happy couple’s big day could help ease a lot of pressure placed on them.
Some financially savvy parents have put the child benefit they receive into a pension for their child. This money may not seem a significant amount but over time it’ll accrue to an impressive sum. Imagine just how much this would be when your child is of pension-taking age. At the current pension-taking age, the money could be invested for 50 years or more.
Known as a ‘junior stakeholder pension scheme’, this effective pension planning for your child is just one of many ingenious ways you can help your son or daughter get on in life.
To discuss anyone of these milestones and ways to plan for them, speak to gpfm’s financial planners today on 01992 500261, or contact us at firstname.lastname@example.org. Our financial planning services will help you find the best ways to save for your child’s big moment.
This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.