Calculating the cost of having a baby

New research from the Money Advice Service has revealed that 50% of parents underestimated the cost of preparing for and looking after their first baby in its first year.

The findings, based on the responses of 1,000 parents with children under 10 years old, revealed that of those who underestimated how much the cost of having a baby would set them back, 61% spent up to £1,000 more than they expected - and more than a fifth (22%) were hit with between £1,000 and £5,000 in unplanned costs.

Moreover, it appears that many parents-to-be don't plan financially for their new arrival at all. Indeed, 33% of the parents surveyed decided not to seek financial advice before they had their first baby, while nearly a fifth (17%) didn't consider the impact of having a child on their money whatsoever.

Furthermore, the research suggested that it's not just prospective parents who aren't getting the financial advice they need. In fact, more than two fifths (42%) of parents say they still wouldn't know where to go for financial advice if planning for baby number two.

In light of the findings, the Money Advice Service has launched a new 'Baby Costs Calculator' - a free tool that helps people work out the expense of raising a baby in its first year.

A spokesperson for debt management company Gregory Pennington commented: "The cost of bringing up a baby can be steep and in the current climate, when many people are sticking to tight budgets, parents could risk falling into debt problems if they don't plan their finances accordingly.

"Anyone expecting a child should consider getting some professional money advice to point them in the right direction."

Daniel Culpan