Money Management March 2017 report government measures that will distort childcare costs with a family earning the national average spends up to 1/3 of their net income on childcare costs, according to the IEA (Institute of Economic Affairs).
The government currently spends well over £7 billion a year on childcare benefits. The IEA claims that current government subsidies, such as the free hour’s entitlement, have distorted childcare prices & made childcare much more expensive.
As well as pushing childcare prices up, the IEA believes that government interventions have significantly reduced parental choice & not produced an improvement in childcare quality.
Len Shackleton, editorial and research fellow at the Institute of Economic Affairs, said:
“Regulation has led to an excessive formalisation of childcare & preschool, which has not only pushed up the subsequent costs but paid scant attention to parental choices.
“Many families may not wish to partake in the structural form of preschool that the government requires as standard.”
Taking the decision to start a family is a major turning point in life. Raising a child not only involves a great deal of responsibility but can have huge implications for your financial situation.
In fact, LV estimates that parents will spend an average of £231,843 on a child in the first 21 years of his or her life, up £2,500 from 2015.
Ensuring that you can cover the day-to-day costs is likely to take priority when you first start a family.
However, making sure that you safeguard your child’s financial future is equally important.
Long-term planning is key, and being aware of your financial options will put you in a much better position to help your child save for the future.
There are some different financial products you can use to your child’s advantage. Consider your priorities and your short and long-term goals when deciding on your strategy. Here are some things to consider when planning saving for your child’s future.
The government currently spends well over £7 billion a year on childcare benefits. The IEA claims that current government subsidies, such as the free hour’s entitlement, have distorted childcare prices & made childcare much more expensive. 
