Most of us, as parents, would love if one parent could stay at home full time with our children. The value of a stay at home parent, it can be argued, is truly priceless in terms of the emotional welfare of our children.
But often times, due to financial pressures it is not possible. I do think it is fair to say that due to rising childcare costs, the value of a stay at home parent, is more appreciated than ever before.
However according to a recent survey by Royal London, 62% of people undervalue the cost of replacing a stay-at-home parent and employing someone to take on their workload.
Royal London asked 1000 men and women of all ages throughout the country, how much, in monetary value, they believe that a stay at home parent it worth. Royal London have reported that while it was clear that people recognise the very hard work that stay at home parents carry out, the survey reveals that they underestimate its value, in terms of the associated cost. The majority (71%) of respondents believe the cost of the stay-at-home parent amounts to €30,000 or less. However, Royal London calculated that the cost would be nearer to €42,000.
Royal London considered the duties of a stay-at-home parent and estimated the cost of replacing the jobs they do for the family and in the home. They included some of the ‘top jobs’ parents carry out on a weekly basis such as cooking, cleaning, driving children to their various activities and so on, and the average workplace costs associated with these duties. Royal London’s calculations revealed the cost to employ someone to do the household jobs normally done by a stay-at-home parent would be at least €42,000 or more. This is over a third more than what the majority of the Irish public think it costs.
Encouragingly though, 29% of respondents said they thought it would be €40,000 or higher.
This is an area as a financial broker that we have seen conflicting ideas on, in terms of how to calculate the life assurance need for the stay at home parent, as they do not have a set salary (one of the main parameters in recommending life cover is replacement of income lost). We have always believed in the need for realistic sum assured for those parents that stay at home as in the event of their death, the cost of all their duties has to be provided for.
At such a traumatic time for a family, we truly believe that financial stresses should not be at the fore front, when a family is going through such a difficult time.
We commend the work of Royal London in trying to highlight this issue; no one wants to think about the serious illness or death but it is a harsh reality of life and as brokers, we can only do our job properly if we have at least assisted our clients in having such a financial safety net in place, if it is ever needed.
Having a ‘set value’ on the cost of the stay at home parent highlights the need for life cover for the stay at home parent and encourages those parents to seriously think about the need of such life cover, as a necessity.
This blog focuses on a survey completed by Royal London. Royal London is the largest life, pensions & investment company in the UK and Ireland. Royal London’s Irish office is based in Stephen’s Green, Dublin.
This is an opinion only and does not constitute advice as individual circumstances will determine all financial advice given.