Preparing for the arrival of your first baby
First-time UK parents spend more than £492 million[1] each year preparing for the arrival of their first baby, according to research from Aviva. This equates to £1,619 per family and shows a 17% increase to the £1,389 total in March 2012[1].
Essential purchases
The new study of 2,000 recent parents found that this is the average amount spent on baby essentials such as prams, baby clothes, cots, car seats and nappies, as well as other nice-to-haves like nursing chairs and mum-to-be treats[1].
However, six out of ten parents admit that, with hindsight, they had bought things that they either didn’t use or could have done without. The most common ‘unnecessary’ items were revealed as mum-to-be toiletries (14%), Moses baskets (13%) and baby slings (12%).
In addition, more than a quarter of expectant or new parents (27%) said they bought or changed their car, with an average spend of £5,298 (up from £2,658 in 2012). A further one in five (20%) moved to a bigger house, with the majority paying around £40,000 in the process, but with one in seven movers spending more than £150,000 to upsize.
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’d 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 (38%) saying they’d taken this step.
Protecting your children
New parents are shown to be rightfully vigilant at protecting their children against risks within the home. A third (33%) of new parents install life-saving smoke alarms and over a quarter (31%) fit carbon monoxide monitors. Stair gates are a must-have for over half of new parents (53%), and four in ten fit safety catches on kitchen cupboards. Many, however, are not considering the importance of also protecting their family’s financial future.
The data shows that almost two thirds (64%) of families have no life insurance in place, and the typical family only has £2,773 in savings[2] 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[3].
Planning for the unexpected
It’s 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’s 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.
Source:
[1]Aviva research, conducted by One Poll, among 2,000 parents with children under five in April 2014.
[2]The Aviva Family Finances Report, December 2013.
[3]Aviva Standard Life Cover on a level term plan for a husband and wife aged 28 (the average age of first-time mothers in the UK), non-smokers, with monthly premiums of £15 over an 18-year period, information correct on 15 April 2014. Amount of cover purchased: £224,224 if either parent were to die or be diagnosed with a terminal illness within the term of the plan. Aviva life insurance includes terminal illness benefit. This means we pay the policyholder a guaranteed lump sum if he or she is diagnosed with a terminal illness and is not expected to live more than 12 months.
[4]Terms and conditions apply.
