Paying the price of children

A report says family incomes have fallen by 2% between May and August this year - suggesting that this reflects a decline in women's earnings. When the cost of childcare is added to going-to-work expenses, such as transport, it says that many part-time workers would be better off if they did not go to work. "The average woman with two children (one year and seven years old) would be out of pocket by £98 per month if she worked part time." says a report.

Families also face higher costs for child-related expenses such as school trips, clothes and sporting activities - calculated as £111 per month, excluding childcare. The report says these costs have risen by 6.9% over the past year.

If families become dependent on a single income, the report suggests that there will be only limited savings to fall back on - with the typical level of family savings falling below £1,000. On average, families are spending about a tenth of their income on paying off unsecured debts such as credit cards. The highest level of such debt is among couples with two or more children.

"Faced with rising costs and largely static salaries, UK families are more worried than ever about their finances," said Aviva's head of protection, Louise Colley.