Consumers fail to calculate real cost of major life expenses

Consumersí estimates of the cost of key life expenses fall more than £132,000 short of the actual expense, research has revealed.

Many of lifeís biggest events can take a real chunk of peopleís money, so it is a good idea to start savings early on.

You can compare savings accounts with Money Expert.

The real bill for major life events such as deposits for first homes, weddings and raising a child totals an average of £310,279. This is £178,140 less than most families have planned for.

If this underestimate is broken down, raising a child exceeds estimates by £92,000 while student debts are £34,000 more than parents have budgeted for. Getting hitched is also underestimated by £12,000, as is the cost of a first house deposit.

The average cost of raising a child is now £165,648, while university debt sets students back by £43,500. Sending a child to university puts a £52,376 dent in the average household budgets, while wedding celebrations come to an average of £20,273. In addition, first time buyers have to save an average of £27,032 for their first homes.

ìUnless people are fully aware of the budgets that are needed and start saving and planning their finances early, some may have to delay these milestones,î said Bruno Genovese, Head of Savings at HSBC.

ìLife’s big events can require a substantial financial outlay and many of those who are yet to go through them are vastly underestimating the costs involved, particularly in light of the hikes to university fees and high inflation.î

The research also found that fewer people are planning to use their savings to pay for forthcoming events, with just 40% of respondents intending to use savings for a deposit on their first house.

To ensure that your savings fall in line with the cost of your first home, you can compare mortgages with Money Expert.

 

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