Larissa Hazell is passionate about children. She was a full-time nanny for 15 years, working 60-hour weeks before her son was born three years ago, and has now set up a company helping parents to find childcare.
But she has made the decision to not have any more children. “My husband and I are priced out of having a bigger family, we just couldn’t afford it,” Hazell, 33, said.
They are not unique. Last year there were some 3.7 million families with only one dependent child — 14 per cent up on the 3.2 million in 2004, according to the Office for National Statistics.
One-child families are becoming more common; in some cases parents simply choose to have a smaller family, but many others are being priced out of having more children. A study by University College London last year found that two fifths of 32-year-olds in England wanted children, or more children, but just a quarter were actually trying to conceive — affordability pressures and career concerns were among the biggest reasons for the delay.
Priced out
Hazell, who lives in Essex, works part-time as a nanny, and can take her son with her to work. She works on The Childcare Guide, her advice website, in the evenings and until 3am twice a week.
“Having a second child is just not feasible. We had a huge loss of income when our son was born because of the change in my working hours and my earnings are now a fifth of what they were.
“Because they are so low I am not saving into my pension, so the economic knock-on effects last for a long time. That’s why I made the decision to start a business, with the plan that it will be my retirement pot,” Hazell said.
Larissa Hazell: “We had a huge loss of income when our son was born. We just can’t afford a bigger family”
HANNAH MORLAND
“We want to be able to give our son access to the experiences and extracurricular activities he would like to try, whether that’s sport or music or something else. We know how expensive they are and having more than one child would restrict that choice.”
A second baby would mean that Hazell and her husband, who works full-time, would have to pay for care for at least one child, as she would not be able to take two children to work. They would also have to move to a bigger home.
“As well as the big ticket costs, it’s also all the general things that come with having children — they are so expensive,” said Hazell.
Fewer children
The fertility rate — the average number of children born to women of childbearing age — in England and Wales fell to 1.44 in 2023, a record low and below the 2.1 children needed for a stable population without relying on migration. It is a problem shared across the world: by 2050 more than three quarters of countries are on track to have a fertility rate too low to sustain their population size.
This has serious implications for the public purse, with fewer babies who will grow into taxpayers to help pay the cost of an ageing population, with greater demand on the NHS, care costs and a growing state pension bill.
The triple lock, which guarantees that the state pension goes up every April by wage growth, inflation or 2.5 per cent (whichever is higher) is already under significant strain. If inflation rises to 4 per cent in September, as forecast by the Bank of England, pensioners could be in line for a £478 boost to the new state pension next year, increasing it to £12,451 a year — at a cost of £2.1 billion to the exchequer.
The Office for Budget Responsibility (OBR) expects the cost of the state pension to be 7.7 per cent of GDP by the early 2070s, about 50 per cent higher than today.
Meanwhile the old-age dependency ratio (a measure of the population aged 65 and over as a share of the working-age population) is forecast to rise from roughly 33 per cent today to 50 per cent by the mid-2060s, according to the OBR.
The Institute for Fiscal Studies (IFS), a think tank, has suggested that the government might look to increase taxes to pay for an ageing population, or make the state pension less generous. The pension is under review by the government and the age at which you can claim it is already on track to increase from 66 to 67 by 2028, and again to 68 between 2044 and 2046.
The Adam Smith Institute, an economic policy think tank, predicts that the triple lock in its current form will become unaffordable by 2036, and the IFS has calculated that the state pension age would need to rise to 74 by 2068-69 to keep funding it.
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Many countries have tried to pay their way to a bigger working population by using financial incentives to encourage people to have babies.
Hungary offers would-be parents tax breaks, cash handouts and free IVF, France has a means-tested birth bonus worth up to about £940 per child, in South Korea new parents can get cheaper housing and lower mortgage rates, and Russia hands out cash bonuses to mothers and the “Mother Heroine” gold medal to those with ten children or more.
But for the most part, the global effort to reverse the declining population has been unsuccessful and no country is expected to have a fertility rate above 2.3 by the end of the century.
Beth Goss with her two children
‘We couldn’t afford a second child without an inheritance’
For some parents, like Beth and Dan Goss, having a second child was only possible after they inherited money from her grandma. The couple had agreed that they could not afford a second child after the birth of their son in 2021.
“We were told in January 2023 that we had been left some money and that meant we could afford a second child. It sounds crazy, but it really was the case. We were already paying £500 a month for our son to be in nursery three days a week and simply couldn’t afford to do that for another child,” said Beth, 33.
She found out she was pregnant in July of the same year and they now have a one-year-old daughter and a four-year-old son.
The couple, who live in Liverpool, pay £1,000 a month for care three days a week, on top of the government-funded nursery hours that both children are entitled to. The bill is more than twice the £470 they pay towards their mortgage each month.
Beth works at a laboratory in a children’s hospital and until recently Dan worked in digital marketing, but navigating their careers in the early years of parenting has been complicated. The rise of artificial intelligence forced Dan to switch careers and he now works as a barista in a coffee shop, which gives him the flexibility to schedule work around the children.
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“I work shifts at the hospital and Dan needs to be flexible. We are almost through the worst of it as our son starts school in September and that will really help to cut costs,” Beth said.
How much to raise a child?
The cost of having a child has risen dramatically amid stubborn inflation, with parents of young children hit particularly hard by annual increases in nursery fees.
In 2023 the investment app Moneyfarm calculated that raising the average child to adulthood would set parents back more than £223,256. This year Moneyfarm expects the cost to be closer to £250,000, a rise of 10 per cent over two years and equal to an annual cost of about £13,900.
Will Stevens from the wealth manager Killik & Co said more of his clients were choosing to have fewer children, or in some cases no children.
“Many are increasingly conscious of childcare, education and daily living costs of their family finances. Mortgage rates have started to come down, but many couples have been locked in at higher borrowing costs over the last few years, or are struggling to get on the property ladder at all, delaying decisions to have children or opting out altogether,” Stevens said.
For many families having a second child would mean a dramatic cut in earnings while expenses for their first child are still high — childcare in the UK is among the most expensive in the world.
Women in full or part-time employment are eligible for 39 weeks statutory maternity pay, with the first six weeks at 90 per cent of earnings before tax and the remaining 33 weeks at the statutory £187.18 — less than half the minimum wage for a 35-hour week.
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Self-employed mothers can claim up to £187.18 a week and new fathers get a minimum two weeks’ paternity leave and, if they are eligible, employers are legally required to pay them at least £187.18 a week during that time. The average cost of 25 hours a week in nursery for a child under two in 2024 (before government-funded free hours became more widely available) was £157.68, according to the charity Coram Family and Childcare.
Campaigners have warned that once maternity leave ends childcare costs are forcing parents — predominantly mothers — into debt as they try to maintain their careers.
The previous government began a gradual rollout of free nursery hours for more working parents in England last year and from September all eligible children aged nine months to four years will get 30 hours of free care a week.
The scheme has more than halved the cost of 25 hours of nursery for a child under two to £70.51, according to Coram Family and Childcare, assuming the child gets 15 free hours of care. But the savings are limited to England. In Wales the cost of care for the same child has risen almost 10 per cent in the past year to £155, and it jumped 7 per cent to £122.38 in Scotland.
Childcare providers have also warned the government that its funding rates do not cover the full cost of the free spaces offered to parents, and they have been forced to increase prices to make up the shortfall. The government-funded hours do not cover the cost of food, nappies and other extras, paid by parents as an additional daily charge and which many providers have increased in an attempt to balance the books.
“For households with two working parents, the cost of childcare or education makes many question the value of full-time work, with some going part-time or leaving the workforce altogether. Even part-time childcare adds a significant cost,” Stevens said.
“This all adds an enormous strain, both to the parent who might consider reducing working hours or leaving work, and to the parent who potentially becomes the sole earner in the household.”
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