The average cumulative cost of raising a child from birth to the age of 21 topped £200,000 (€228,018) for the first time, increasing by four per cent in a year, according to figures released yesterday.

The cost rose by 43 per cent since the annual survey by insurance and investment group LV= began in 2003, even though three in four parents (77 per cent) reported cutting back on spending due to the economic downturn.

The £201,000 total, including £9,152 in the first year alone, shows childcare - involving nursery fees, after-school clubs and holiday clubs - remains the biggest expenditure at £54,696.

This is more than the cost of an education, which is in second place at £52,881.

The figures put food at £17,490, clothing at £14,035 and holidays at £13,207. Costs peak during the university years of 18 to 21 (£13,677 a year) but parents of toddlers are likely to find themselves paying out around £13,014 each year.

Parents in outer London pay the most to raise a child, spending an average £220,769, while Yorkshire and Humber is the cheapest area at £177,706, the study found.

However, the amount of pocket money a child receives crept up by almost five per cent this year to £4,338, having fallen from £5,469 in 2007.

The study found that 13 per cent of parents were specifically asked for less pocket money by their children over the past year.

Just over one in three (35 per cent) parents regularly reduced their savings to make finances go further, while 19 per cent had cancelled or reviewed their insurance and income protection.

LV= Group chief executive officer Mike Rogers said: "For the first time since this report began, the cost of raising just one child has topped £200,000.

"Every parent will know how expensive it can be to raise a little one and, as parents, we know we don't begrudge a single penny of it. But I suspect many new and prospective mums and dads will be a little shocked to see the potential financial burden ahead of them."