Income of £25k needed before starting a family

Before having children, Britons believe you should have an income of at least £25,000 per annum to ensure financial security, while one in five (20%) said that they would seriously consider not having children because the cost of having them nowadays is so high. This is according to a report, Families, Finance and the Future, carried out for NS&I by the Future Foundation.

Almost two-thirds (64%) said you should be financially secure before starting a family, while 78% agreed that the standard of living was an influencing factor when deciding how many children to have. Just 26% of Britons believe that money shouldn't be a consideration when deciding to start a family.

Tim Mack, NS&I Savings Spokesman, said "Starting a family is always going to be much more than a purely economic decision, though for some, the financial requirement is clearly an income of £25,000 per year. Britons are also considering their financial future when deciding on the number of children they will have."

More than one in ten respondents (12%) thought you should be earning between £40,000 and £70,000 before having children, while a similar number (13%) said you didn't need anything, and that you would always be able to get by. Men were more likely to suggest a bigger financial cushion than women - £27,000 per year, compared to just £23,000 for women - while people without children gave much higher estimates, saying you should be on £30,000.

As well as looking at the situation for individuals, the report also argues that finances and families are linked on a larger, macroeconomic, level.

Barry Clark, Account Director at the Future Foundation, said "Baby booms tend to follow economic booms and the reverse is true too. Our data suggests that over the past 60 years, GDP growth and the change in birth rates in the UK have been closely linked, so we expect that coming years will show more than ever that finances and families are related on both a personal and national economic scale."

The primary influences on the number of children people decide to have appear to be common:

78% consider the standard of living they can give their children
73% consider meeting the cost of raising their children
51% consider the size of the house they can afford to raise their family in
39% consider the education they can make sure their children receive
 
It is evident that perceived affluence has an effect on the birth rate. In fact Future Foundation research and the British Household Panel Survey both have shown that in European countries where more people have an income that is either in line with or above their financial expectations, families bear more children.

This increase in fertility stops short of the top income decile. Barry Clark states "The highest earners would seem less likely to have larger families owing to the demands of and devotion to their careers, or a sharper awareness of just how much children cost to raise."