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Last Updated: Friday, 2 March 2007, 00:00 GMT
The cost of kids
By Claire Messenger
BBC Money Programme

Anthony and Kate Flagg
The Flaggs are prepared to spend a bit extra
Kate and Anthony Flagg from Hertfordshire are typical of many parents to be.

They have decided they want their first child's nursery to be as smart and stylish as the rest of their house, and are prepared to spend that little bit extra to make it happen.

One company benefiting from parents' desire to spend is Mamas & Papas, the designer nursery store.

Its commercial director, Tim Maule, has noticed parents have more money to spend because there has been a shift to starting families later in life.

"There is more disposable income and people are prepared to spend more, particularly on the first child, than they have in the past," he says.

Even if parents opt for basic furniture, Liverpool Victoria's annual survey calculates they will still spend 4,000 on start-up items in the first year of their child's life.

But there are also plenty of opportunities to splash out: a gold-plated pram sells for 2,000 on the High Street and parents can even buy a single dummy for 23.

Main reasons why parents delay parenthood:
Children counting money
20% - move to a larger house
36% - progress in their career
43% saving money to become parents
Source: Money Programme survey

Many parents have to return to work to pay for all this, but that is expensive as well.

Parents who return to work six months after their baby is born can expect to pay an average of 3,600 for childcare in the first year of their baby's life.

The BBC Money Programme commissioned an exclusive survey to find out how costs are affecting parents decisions.

Twenty per cent are delaying parenthood until they move to a larger house, 36% wanted to progress in their career before becoming a parent and 43% are delaying starting a family until they have built up their savings.

Childcare costs keep rising

Teachers Jeremy and Clare Hollingsworth have two children.

Clare and Jeremy  Hollingsworth
The Hollingsworths are finding it hard financially

Despite both parents being in full time work, they find childcare costs at more than 1,000 a month expensive.

They even had to delay having their second child as it would have been too expensive to pay for two nursery places at the same time.

"Childcare is certainly very expensive," says Mr Hollingsworth.

"What with the costs of living, rises in inflation and the mortgage, we do find it difficult."

In the last five years, nursery fees have gone up by almost 30%, according to a Daycare Trust report.

Last year alone, saw a 6% rise in a typical full-time nursery place in England - an increase of twice the rate of inflation.

And two thirds of parents have reported a lack of affordable childcare in their local area last year.

Early toys are cheap compared with those bought later

Purnima Tanuka, chief executive of the National Day Nurseries Association, says the costs of running a nursery are higher than people imagine.

"More day nurseries are employing well qualified staff, who need to be paid good salaries. The cost will have to be picked up by the parents."

And parents certainly are footing the bill.

According to Liverpool Victoria's survey, the average cost of childcare for children between years two and five is nearly 14,000.

Toys and skills

It doesn't stop there.

Parents are under ever more pressure to spend on toys, gadgets and designer clothes.

The UK's toy industry was worth 2.2bn last year, with electronics the fastest growing area.

Parents spend more on their first child

Children today want ever more sophisticated gadgets and toys, from MP3 players to computer consoles to DVD players.

Our survey revealed that 19% of parents said they had been buying items for their children as a result of their pester power.

A further 19% had used their credit card to pay for them.

Designer clothes for children are becoming increasingly popular.

Clothing boutiques are springing up all over the country, filled with mini versions of designer label goods.

The Money Programme survey showed that 65% of parents admitted spending more on their children's clothes than on their own.

The final expense facing parents is the cost of putting children through university education, which could cost as much as 32,000.

When added to all the previous expenditure brings the total cost of bringing up baby to 180,000.

Money Programme: The cost of kids. Broadcast Friday 2 March at 7pm on BBC2.

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