Financial cost causes 41% of younger parents to regret having kids 

The rising cost of living has led millions of people across the country to cut back on their expenses – reducing the amount they spend on food, subscriptions, essentials and luxuries among other costs. But what about the expenses that can’t be cut?

According to recent research commissioned by Janus Henderson Investment Trusts, more than two in five (41%) younger parents in the UK aged 18-34 have said they regret having kids because of the rising cost of childcare.

Those surveyed have admitted that cost of parenthood hit them hard, leaving them regretting the choices they when deciding to start a family. Additionally, the research also revealed:

• A quarter of parents with kids under 18 now say they regret starting a family
• Around one in four parents (23%) wish they had waited to have children until they were earning more money as a household or until they saved more money (22%). 
• Just 14% of parents with kids under 18 say that friends, family, and/or godparents regularly contribute to their children’s savings
• Half of younger parents (50%) don’t think there are enough resources easily accessible to them regarding the true cost of raising a child

More than two in five (41%) younger parents in the UK, aged 18-34, say they regret choosing have kids because of the costs. Among those parents with kids that are still under the age of 18, the figure sits at 25%.

New research commissioned by Janus Henderson Investment Trusts sought to examine how parents are saving and investing for the future, what impact the rising cost-of-living has had on their finances, and the importance of financial ‘smart parenting’. A significant number of parents found that the finances of parenthood hit them hard and left them regretting the choices they made about whether and when to start a family.  

Around one in four parents (23%) wish they had waited to have children until they were earning more money as a household or until they saved more money (22%). The expense of having kids has also impacted people planning their families, with around a fifth of parents (21%) stating that they have chosen to have fewer children than originally planned. Nearly a quarter (22%) are glad they are parents but said that they still resent the financial sacrifices they have had to make, while 15% said that they’re glad they’re a parent, they wish they’d had fewer children.

Interestingly, parents expect to financially support their children until they are 21 years old on average. But around one in five (18%) parents think that, should they have another child, they expect that they’d need to financially support that child indefinitely.

Looking at how parents are coping with the challenge of saving for their children’s futures, many are facing the prospect with limited, if any, external contributions. Just 14% of parents with kids under 18 say that friends, family, and/or godparents regularly contribute to their children’s savings. While more than a third (35%) say that this group occasionally contribute, the research revealed that around two in five (43%) parents of under 18’s do not receive any financial contributions from friends, family, or godparents for their children’s savings.  

While three quarters (72%) of parents of children under 18 regularly save money towards their child’s future, one in five (20%) have either reduced or halted saving over the past 12 months. More concerningly,17% of those with kids up to primary school age, and 21% of those with kids aged 18 and under, admit that they do not regularly save money for their children’s future.

What is also clear is that many parents are still struggling with finding the help they need to navigate the financial challenges of parenthood. Just 38% of parents said there are enough resources easily accessible to them regarding the true cost of raising a child. For parents with kids under 18, the figure sits at 42%, rising to 50% of younger parents.

Dan Howe, Head of Investment Trusts, Janus Henderson said: “One theme that emerges clearly from the data is that many parents, with hindsight, would change the way they prepared for the financial pressures of being a parent if they had the chance. Most importantly, a big majority of parents are able to save regularly for their children, and are doing just that, but that comes with considerable sacrifice. The cost-of-living crisis exacerbates this situation further – the increased cost of maintaining the same standard of living for their families mean there is less for them to save for the future.

That is why it is so important that parents take steps to ensure they are making the absolute most out of these savings. It can seem daunting to start investing during times of market turmoil, but with a considered financial plan, it can make a real difference. Many parents long-term saving goal is to be able to support their child later on in life, whether that be helping them with university fees or in getting on to the property ladder. Fortunately, these longer-term goals provide parents with a lengthy time-horizon over which to invest. Any sort of regular investment, regardless of its size, can be truly impactful when left over this kind of time-period. There are also many investment options which offer the potential for a very welcome additional income stream to add to that savings pot.

Saving for your family’s future can seem particularly daunting at times like these but there are few things that have greater impact than developing a long-term savings plan as early as possible.

Methodology:

• Janus Henderson Investment Trusts commissioned Opinium Research to conduct a nationally representative survey of 1,219 UK Parents. The survey was conducted between the between the 26^th and 29^th August, 2022.

 

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