Vital financial protection is being overlooked by UK couples embarking on parenthood for the first time according to new research by insurer Aviva, which reveals that an average of £1,645 is spent preparing for the arrival of a first baby, equivalent to more than £469 million a year across the UK.
The study of 2,000 UK parents with children under the age of five shows that average spending on first babies has increased more than 18% on the £1,389 average spend in 2012 when the study was first conducted.
Consistent with its previous research, Aviva found that items such as prams, car seats and cots are still seen as essential purchases.
The most common items that parents said they didn’t use or could have done without were breast pumps (15%), baby slings (14%) cot mobiles (13%) and pamper treats for the mum-to-be (13%). The average spend per household on these items alone is £134.59.
Whilst parents-to-be are rightly focused on the joyful preparations for their new arrival, the study shows that unfortunately, preparations do not always extend to important long-term financial planning.
A monthly premium of £15 for a standard life insurance policy for both parents for 18 years, would provide a £237,123 tax-free sum if one of the parents died or was diagnosed with a terminal illness within that period.
Even fewer parents with under-fives in the survey had made a will, at just 16%. These two indicators of important financial planning are in stark contrast to the risk-prevention that parents do undertake to safeguard the physical wellbeing of their new baby. Unsurprisingly two-thirds (66%) installed stair-gates, a similar proportion (63%) moved medicines out of reach, while half (49%) fitted catches on kitchen doors and cupboards.
Paul Brencher, Aviva UK Health and Protection Director said: “Considering that buying your first house and starting a family are traditionally the most common life events that prompt the arrangement of life insurance, it is very concerning to see that nearly three-quarters of first-time parents are not protecting their families’ future financial wellbeing. Additionally, a large proportion of UK adults have little or no savings that they could rely on to help weather the financial fall-out of an unexpected loss of income due to ill-health from a working parent.