Brits underestimate cost of life's big events by £1,24,000

It has emerged that Britons are underestimating the cost of life’s major events by at least £1,24,000.

A research carried out on behalf on HSBC revealed that the average person thinks getting married, having children and other key milestones, such as going to university, buying their first home, car and sending a child to university, will cost them around £1,90,000.

But in reality they are more likely to cost £1,24,000 more at £3,14,000, reports the Daily Mail.

People are most likely to underestimate the cost of raising their first child, with Britons guessing this would set them back by around £86,000, when in reality it is more likely to cost £2,02,000.

Consumers also thought the bill for a wedding would come in at around £8,600, rather than just under £20,000, while at £11,000 they also underestimated how much debt they would leave university with by nearly £9,000.

But the majority of people correctly guessed that sending a child to university would cost around £41,000 and they thought they would need to spend £5,000 on their first car, when people typically spend only around £2,500.

Consumers also thought they would have to put down £38,000 as a deposit on their first home, rather than the £29,000 typically put down by first-time buyers.

“Life's big events can be expensive and many who are yet to undergo them are significantly underestimating the costs involved,” said Richard Brown, head of savings at HSBC.

“The reality is that some people may have to postpone some of these key milestones unless they fully understand the budgetary implications and start planning their finances or saving earlier,” he added.