€100,000 cost of raising a child up to college age

Raising a child from the cradle to college costs more than €100,000 — with most parents admitting feeling pressure to give their children everything.

The research by Laya Life, based on a survey of 1,000 parents, examines the significant child-related costs parents incur over the first 21 years, from the everyday cost of food and clothing, to the higher costs of childcare and education.

The study found that Irish households are spending an average of €11,033 every year on their children.

Childcare is the biggest outlay for parents each year at just over €4,000, followed by the cost of university and third level college fees each year (€4,056), and other education-related costs including school books, uniforms and extra-curriculum classes (€1,707).

Six out of 10 of the parents surveyed said they were struggling financially and were not currently able to put any money aside for savings. Children aged between 15 and 17 years old cost the most money, with monthly household costs peaking at €1,068.

Despite the cost of raising children until they are 21, less than a third of the parents surveyed said they had estimated the future cost of supporting their children until they are old enough to support themselves, with just 29% having a savings plan in place to cover the cost of raising their children.

Two fifths (42%) of parents do not have life assurance in place to protect their family should the worst happen, with almost half admitting to having cancelled policies in an effort to save money.

One in four cancelled their pensions for the same reason.

Almost half of parents have put off saving for their retirement to help support their children financially.

The average age which parents expect their children to fully support themselves is 24, but most said they want to help their children when it comes to buying their first home and getting married.

One in three said they hoped to be able to give their children a financial dig-out when they decide to have a family of their own.

Economist Joe Durkan, who, along with Moore McDowell, collaborated on the research, said the findings showed parents want to save to help their children financially on the one hand, but are struggling to save money on the other.

“It’s the worst recession the world has experienced since the Great Depression of the 1930s, and the worst in Ireland since the 1950s,” said Mr Durkan.

“Many parents today have raised their children in exceptionally difficult financial circumstances and it’s clear from the research that savings and important financial protection such as life insurance have been put on the long finger or forgotten altogether as parents fight to survive financially.”

Mr McDowell said parents needed to have a strategy to make sure their children are looked after in the case of their premature death

“Pension planning for retirement is an obvious example, but there are many other plans that parents should consider,” said Mr McDowell.

“Insurance in various forms is central to such a savings strategy and what’s worrying about this research is that it appears that half of parents aren’t saving anything, and a huge majority — 64% — have cut back essential financial protection such as life insurance and pensions,” he said

“This needs to be reversed as the economy recovers.”