UK families have it rough today with so many things to worry about. Studies have shown that parents are paying more and more each year to raise their children in the UK and new parents can find it difficult to manage their finances and figure out costs. That’s why we’ve put together our findings on UK family spending habits – to find out how much UK parents are spending and where all of these expenses are coming from.
How much are UK Families Spending?
Family spending continues to go up across the UK, but it’s London families that are seeing the worst of it. On average, families in London are spending as much as £117.90 a week on housing and fuel alone, which is a lot when you compare it to families in Northern Ireland who spend less than half of that amount. When you compare the costs overall, however, it can seem even worse as the total weekly spending for London families averages at £652.40, which is almost 200 pounds more than families in the North-East. London is the most expensive place to live in the world, coming in the top 10 of world’s most expenses places to buy property, so it’s no wonder London families are facing such heft bills.
What Are UK Families Spending Their Money On?
When you look at where family income is going, you can start to see why having a family can be as costly as it is. As well as housing and fuel being some of the most substantial expenses, families can spend as much as 14% of their income on transport in general. London has one of the world’s most expensive transport systems and most people working in London get around by train. While most Londoners use Oyster cards to reduce the cost of their travel, Londoners can end up paying anywhere between £4 and £12 per day to get around – even with an Oyster card – which all adds up over time. But, travel isn’t the only cost that families need to worry about. Food can get pretty costly as well, taking an average of 11% out of your income and that doesn’t include the additional 9% that goes towards restaurants.
Overall, there are a lot of expenses that UK families need to worry about, which is why putting together a budget is one of the first steps you can make to save money and organise your bills.
How Much Does It Cost To Raise A Family In the UK?
The average cost of raising a child last year managed to range between £72,000 and £183,000. Even without considering the extra expenses of providing for children, the cost of raising a child has gone up by more than £1,000 for single parents in the UK. Statistics from 2016 have also shown us that the full cost of raising children – which includes council tax and childcare – is going up for both single parents and married couples. In four years, the full cost of raising children has gone up by almost £9,000 for couples raising a child and over £27,000 for single parents – that’s an increase of over 15%.
Increasing costs are showing parents that it’s never too early to start teaching children about financial responsibility, which is why more and more UK parents are giving their children pocket money. However, most parents take different approaches to giving their children an allowance with some parents controlling what their children spend their money on and others letting them buy what they want. 21% of UK parents are also making the decision to encourage their children to save their pocket money, which may help children learn the right way to save.
How Much are UK Families Saving and Why?
While it’s sad to see that costs are going up for UK families, a positive thing to note is that UK families are also getting better at saving their money. Whereas seven years ago 35% of families were not making any effort to save money, in 2015 that number went down to 25%. The amount that people are saving is going up, too. In 2010 families saved an average of £70 per month, but in 2015 they were saving around £105 a month and that number continues to go up. With families overall saving at least five times more in 2015 than they managed to in 2010, they are more prepared to deal with the expenses that worry them.
While different families have different motivations for saving, concern over emergency expenses seems to be on the rise and is the biggest worry for UK families today, more so than parents losing their job or falling ill. In 2015, 57% of families considered unexpected expenses to be one of their main motivations to save money and these types of expenses are often why many people turn to direct lenders like Wizzcash. The payday loans that were provide are specifically designed to help out people encountering unexpected expenses, like repairing damages around the home. However, if families continue to get better at saving, they will have more money put away to fall back and won’t need fast loans as frequently and teaching their children to save will lead to better saving habits in the future.
Generic advice is not a service regulated by the Financial Conduct Authority.