The average couple in the UK spend £877,000 on key lifetime events such as buying a house, getting married, having children and enjoying a comfortable retirement, a new report from Lloyds Bank has suggested.
The cost varies wildly across the UK, Londoners face an average cost of close to £1.2 million compared to a leaner £702,000 in the North East.
The Lloyds Bank Family Savings report conducted as a straightforward calculation of total costs for these life events by reviewing a handful of important ‘life goals’ separately. Included in the total costs were:
- Average cost of marriage: stands at £11,168 (average 2010-2014).
- Average amount spent on new born babies: The average amount spent on babies during their first year is £3,069.
- The cost of buying a house: Atypical three bedroom semi-detached house in the UK is close to £175,000 (£174,429).
- The cost of retirement: The report says that the joint retirement fund required to maintain an average couples’ standard of living currently stands at close to £685,000.
The average married couple has to borrow exactly 50% of the total money used to fund their own share of wedding costs. Only 9% of people marrying had to borrow all of the money they spent on their wedding, while 43% managed to fund their wedding entirely from savings. The average first time parent has to borrow only 9% of first-year baby costs, while 73% manage to avoid ‘baby-borrowing’ altogether.
The report reveals that those who start saving early in life are 50% to 57% more likely to gain ownership of property and investments in their forties and fifties. For example, among those 45-64 year-olds who started saving seriously before age 25, 55% now own their home outright, whereas among those who only started saving seriously at age 34 or later, only 35% owned their home outright.
The theme continues with non-cash investments, such as shares. 60% who started saving seriously before age 25 owned non-cash investments, compared to just 40% of those who didn’t start saving until 34 or later.
Philip Robinson, savings director at Lloyds Bank, said: “The average cost of meeting our lifetime goals is almost a million pounds, which is a daunting figure for anyone. However, the report clearly shows that by getting into the saving habit early you can significantly improve your financial health later in life.”