22nd April 2014
First-time parents in the UK are together spending more than £492m every year on the likes of prams, baby clothes, cots and car seats research from Aviva has found.
This equates to £1,619 per family and marks a 17% increase on the £1,389 total in March 2012.
But the insurer’s survey found that 60% of parents admit that with hindsight, they had bought things that they either did not use or could have done without.
The most common ‘unnecessary’ items were revealed as mum-to-be toiletries, moses baskets and baby slings.
In addition, more than a quarter of expectant and new parents said they bought or changed their car, spending an average of £5,298, almost double 2012’s total of £2,658.
READ MORE: Preparing financially for having a baby
A further one in five, or 20%, moved to a bigger house, with the majority forking out around £40,000 in the process, but with one in seven movers spending more than £150,000 to upsize.
However, the study also showed a worrying proportion of new parents could be risking their children’s financial futures by skimping on life cover, with just one in five saying they had taken out life insurance or reviewed their protection needs at this time.
New parents were twice as likely to start a savings account for their new arrival, with two out of five or 38% saying they had taken this step.
The data from Aviva also shows that almost two-thirds, at 64%, of families have no life insurance in place and the typical family only has £2,773 in savings which, without any other income, would last less than two months on average. Yet if a ‘typical’ family paid £15 a month on a standard life insurance policy for both parents for 18 years, they could receive more than £224,000 tax-free if a parent died or was diagnosed with a terminal illness within that period says the insurer.
Louise Colley, protection director for Aviva says: “It is only natural that people want to give their baby the best of everything, particularly when they’re about to become parents for the first time, but it is also important to think about planning for the unexpected. Life insurance should be seen as just as much an essential as the pram or the car seat, as it’s there to protect your loved ones’ futures.
“It’s interesting that most new parents admit they’ve spent money on items they didn’t need or never used. Life insurance is of course another thing that people hope they’ll never have to make use of, but the peace of mind of knowing your family will be provided for, should the worst happen, is absolutely invaluable.”