Parents have been urged not to cut back on their savings or cancel insurance policies, even though school summer holiday spending is set to soar.
Parents in the UK will spend an average of £660 per child over the coming 42 days that their offspring are away from school, according to LV=.
The majority will be spent on entertainment (£414), with the remainder being taken up by childcare expenses (£246).
Nearly half of parents (49%) said they will need to pay for childcare during the summer break, while almost all (93%) will be spending extra on entertainment.
Worryingly, however, over a third of parents admit the costs associated with school holidays are unaffordable.
As a result, family is often relied upon to look after little ones for free, while holidays abroad are increasingly falling by the wayside.
Some things should not be compromised on, however, according to Mark Jones, LV= head of protection, no matter how much a child pleads for a new Playstation.
"Many families will be looking at short-term measures to stretch the budget and try to save money in some areas to spend in others," he adds.
"Yet it's important to keep the bigger picture in mind. For instance, cancelling insurance policies or cutting back on long-term savings could have a huge impact on a families' finances if a parent were suddenly unable to work due to accident, illness or unexpected job loss.
"With 14% of parents saying they have recently made cuts specifically to their life, health, or unemployment insurance people could be leaving themselves and their families unprotected."
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