COMMENT

How Much Is A Mum Worth?

By Cliff D'Arcy
March 24, 2006

It's Mother's Day on Sunday, so don't forget to send a card, gift or flowers to your dear old mum!

While we're on the subject of mums, for the last 25 years, leading life and pensions provider Legal & General (L&G) has conducted an annual "Value of a Mum" survey to establish the financial value of all the hard work that mums do. The research calculates how much it would cost to replace a mum's work around the home, such as bringing up children, cooking, cleaning, shopping and other essential household activities.

This year's survey shows that the value of a mum in 2006 is almost £24,500 a year, or over £2,000 a month. It may surprise you to learn that this is higher than the national average wage, which is currently £23,400, according to the 2005 Annual Survey of Hours and Earnings.

L&G's first survey, conducted in 1981, calculated the financial value of a mum's efforts to be a little over £10,600, so a mum's efforts have become far more financially valuable over the last quarter-century. Indeed, L&G found that mothers spend an average of 66 hours a week (almost ten hours a day) on household chores.

Men, on the other hand, contributed just 34 hours of work around the home, almost half of the time put in by women. This explains why the value of the work done around the home by a typical dad would cost just £12,700 a year (£245 a week) to buy in! Hence, despite the fact that women now have more opportunity to succeed in business and society, many homes still largely operate along traditional gender divides, largely because men are more likely to be in full-time work.

Furthermore, both men and women severely undervalue the financial worth of a mum. Although the actual figure is £470 a week, men guessed it to be £267, while women guessed a little higher at £278. Naturally, childcare accounts for a large proportion of this figure; L&G estimates that raising a child to age eighteen costs a massive £123,000. Hence, half of all parents (49%) believe that the government could do more to help families with children through tax breaks.

One alarming statistic which emerged from Value of a Mum was the fact that only a quarter of men (25%) and a sixth of women (17%) have insured their own lives. This is a serious concern, particularly because parents are having children much later in life, thanks to increased career and financial pressures. Hence, older parents are more likely to die leaving dependent children, so it's crucial that they insure themselves -- and non-working spouses or partners.

In my opinion, parents with dependent children (including those who in further education who may be 21 or more) who haven't taken out life insurance (to protect against death) and income protection insurance (to protect against long-term sickness or injury) are gambling with their family's security and well-being.

Given that a healthy, non-smoking, 25-year-old women could buy a thirty-year policy providing £100,000 of life cover for around £6 a month, this is a tiny price to pay for increased financial comfort and peace of mind! However, before buying any life insurance, read these five tips on getting more cover for less cash.

In summary, although you may have a policy which will pay off your home loan if you die or suffer a critical illness, you may not have enough (or any) protection to replace your income and/or contribution around the home. Happily, low-cost quality insurance can bridge this gap, as I explained in Eight Ways To Protect Your Wealth, so what are you waiting for?

More: Get a quote in our insurance centre | Three Shares For Mum.

Cliff owns shares in Legal & General.