By Ben Simmons
First-time UK parents spend more than £425 million1 each year, preparing for the arrival of a first baby, according to research revealed by life insurance provider Aviva. This equates to £1,370 per family.
A new Aviva study of 1,500 recent mums, has found that this is the average amount spent on essentials such as pushchair, baby clothes, cot, bedding, car seat and nappies, as well as other "nice-to-haves" like nursing chairs and mum-to-be treats1. Although six out of 10 mums admit that with hindsight, they had bought things that they either didn’t use or could have done without.
In addition more than a quarter of expectant/new parents (27%) said they bought or changed their car, with an average spend of £2,658; and a quarter (25%) moved to a bigger house with an average spend of £20,813.
However, against this backdrop of infant expenses, the study also showed four out of five new parents are risking their children’s financial futures by skimping on life cover. While two out of five (40%) start a savings account for a new arrival, fewer than one in five (18%) take out life insurance or review their family protection needs at that time. This is despite the fact that some new parents clearly do consider the difficult "what if?" scenario, with a quarter (25%) stating they had chosen a guardian for their child if they were to die.
New parents are also shown to be rightfully vigilant at protecting their children against risks within the home. Over a third (35%) of new parents install life-saving smoke alarms and over a quarter (29%) fit carbon monoxide monitors. Stair gates were a must-have for over half of parents polled (54%), and nearly half (46%) move medicines out of reach. But many are not considering the importance of also protecting their family’s financial future.
Aviva data shows that two-thirds (60%) of families have no life insurance in place and the average family only has £928 in savings2 which, without any other income, would last them around half a month. Yet if an "average" family paid £10 a month on a standard life insurance policy for both parents for 18 years, they could receive more than £128,000 tax-free if a parent died or was diagnosed with a terminal illness within that period3.
Louise Colley, head of protection marketing and sales for Aviva and a mum to four-year-old twins says: “Having a baby - particularly a first baby - is a hugely exciting time for parents, so it’s quite understandable that people want to splash out and make everything perfect for their new arrival. However, it’s worrying to see that so few new parents have really thought through how they would provide for their children if the worst were to happen and they weren’t around.
“As this survey shows, the vast majority of people admit to spending money on items that they never use or could have done without - but we’d urge mums and dads to view life insurance as just as much an ‘essential’ as a cot or nappies. It’s great to see that parents are taking the vital safety steps like fitting smoke alarms and stair gates, but it would be fantastic if more parents put family protection on this ‘must do’ list. Families are the most precious things to all of us, so let’s do everything we can to protect them.”
Aviva offers free life cover of £10,000, per parent, per child to new parents in the UK who register before their baby is six months old, to run until the child’s first birthday. New parents can register for the Aviva offer either online by visiting www.aviva.co.uk/life by phone on 0800 404 6465 or by speaking to their financial adviser.
Aviva’s advertisement to raise consumer awareness of the importance of protection, featuring Paul Whitehouse is currently being shown on UK television.