The cost of raising junior from birth to the age of 21 has risen by 9% in a year and now stands at a grand total of 180,137. This works out at 23.50 a day. Interestingly, the biggest increase has been in the cost of education which now stands at 46,778 for every child, up 26% on last year and almost four times the rate of inflation.
This increase in cost has led to a shift whereby more households are relying on two incomes to raise their families. This appears to be the case in two-thirds of families and it is now a luxury rather than a choice for one parent to stay at home and look after the children.
From a protection viewpoint, the research shows that parents have a specific need for protection – it’s not just about the mortgage and the bills but also the sometimes forgotten costs such as education.
So are families identifying their needs and taking steps to protect themselves?
Scottish Widows’ UK Protection Report breaks down the protection gap by groups. When looking at people with children the report shows that despite being slightly more aware of the need for protection than the rest of the population they are still underprotected, especially in the event of an illness striking a wage earner.
Despite the obvious emotional trauma of losing a loved one it’s a sad fact that families are often financially worse off in the case of an illness than a death. The ill person may require a carer. They can’t earn an income but remain a mouth to feed.
When you are speaking to clients with families, remind them of the cost of raising their children and remember 180,137 is just for one child. It’s unlikely they will think this is too much so you may need to break it down for them.
It’s also unlikely they will have thought about how they would cope should the family lose an income. You are well placed to advise them on the most appropriate protection product for them and also to remind them that an income can be lost as easily through illness as through death.