First-time parents’ big spenders!
Preparing for your first child is like no other experience in your life, you have no idea as to how much your life is going to change or what you really need to buy as part of the preparation for the new arrival. According to research from life insurance provider Aviva, first-time parents spend £492 million each year in preparation for the arrival of their first baby. Which equates to £1,619 per family, a 17% increase on March 2012 figures.
The Aviva study found that this was the average amount spent on baby essentials such as Prams, baby clothes, cots, car seats and nappies. Looking back to last year I remember wanting to splash out in preparation of our first child and costs can quickly stack up! Luckily with the help of friends and family our essentials list was pretty concise. It is not surprising that 60% of new parents buy things that they either don’t use or could do without, with the most common ‘unnecessary’ items being mum-to-be toiletries, a baby bath and a Moses Basket.
Preparing for a new arrival is an exciting time, but as to be expected it is a life changing experience in addition to making the essential baby purchases. More than a quarter of new parents said they bought or changed their car before the arrival of their first child. With a further 20% moving to a bigger house!
The Aviva research shows that as new parents we were twice as likely to start a savings account for our new arrival, with two out of five parents setting up a savings account and savings plan for the new addition. So that they have a nest egg for when they are older.
And we are extra vigilant particularly once our little ones start to move with protecting them in the home with stair gates, fire guards, safety catches on kitchen cupboards and installing smoke alarms. However the data shows that almost two thirds (64%) of families have no life insurance in place. Surely as new parents we should consider putting a small amount aside each month to protect our family’s financial future? So if something unexpected were to happen then our family is protected and looked after. It should be considered just as essential as a buggy or a cot!
What is it about life insurance that we don’t want to commit to? Is it that we don’t want to think that we will make use of it? And of course we hope that we will never use of it, however the peace of mind of knowing your family will be provided for, should the worst happen is absolutely invaluable.
People are comfortable with investing £10 a month into a high-street savings account with a 3% interest rate and the Aviva research shows the typical family only has £2,773 in savings. This amount of money would probably last less than 2 months without any other income. However if a ‘typical’ family paid £15 a month per parent for 18 years on a standard life insurance policy, they could receive more than £224,000 tax-free if a parent died or was diagnosed with a terminal illness within that period*. And this lump sum is guaranteed as soon as the policy is in force, giving your family immediate security for the future.
Additionally Aviva offers free life cover for £15,000 per parent, per child to new parents in the UK. There is no catch new parents can register for the Aviva offer either online by visiting http://www.aviva.co.uk/life/free-parent-life-cover/ or by phone on 0800 404 6465 anytime before your child’s 4th birthday and the free cover lasts for 12 months. Why not look to taking the first steps in protecting your family today and take advantage of the free cover.
*Example taken from http://www.aviva.com/media/news/item/uk-first-time-parents-spend-492-million-preparing-for-baby-17298/ article. Terms and conditions apply.