Personal finance - Working out mum's worth in cash terms.

orth?'[QQ] Certainly more than a box of chocolates, a handful of tired flowers and a gaudy card with a picture of an overweight teddy bear on the front of it. But how much more? Insurer Legal & General has published a series of calculations which try to put a cash value on the work that mothers – and fathers – do around the house. Cooking, cleaning, gardening and childcare all come under the microscope. The company’s Value of a Mum 2000 study concludes that the average woman in the UK spends a mighty 67 hours a week on the household chores. As you might expect, the hours vary according to whether a mum is in a paid job or not. Those in full-time work still manage 56 hours a week around the house, part-timers average 68 hours at home and no-job mums put in an average 76 hours. Men, the slackers, do a miserly 31 hours a week on average. Legal & General then calculated the value of all this unpaid work (see table). The result? A mum putting in the average 67 hours a week is doing work worth #19,651 a year. And this may point to a big blind spot in the family’s insurance plans. While most families make at least some effort to buy life cover for those in work, they frequently overlook the woman or man who stays at home. But what happens if it’s the non-worker who is run over by the proverbial bus? Does their partner give up their job to look after the kids? Can they afford the cost of childcare? Will the house go to rack and ruin? Not if they have bought a decent level of life insurance, says L&G. It is wise to take studies like this with a pinch of salt. For starters, the numbers it has come up with are suspiciously high. Working mums, for example, say they do an average 56 hours of household chores per week. There are 168 hours per week. Assuming 7 hours of sleep a night, a working week of 38 hours and five hours travel to and from work per week, that leaves our working mum only 20 hours a week to cover washing and dressing herself, shopping, socialising and watching TV. Of course, the hours seem high. They are based on interviews with parents who, speaking from personal experience here, are likely to overestimate the amount of work they do in such surveys. Which working mum is going to confess to not having cleaned the bathroom for a fortnight? Which supposed new man will admit to having produced microwave chips when it’s his turn to cook? No, they’ll tell the survey that they somehow manage to be perfect parents. And some of the tasks are not mutually exclusive. Believe me, it is possible, if not fun, to cook, garden and look after a baby all at the same time. Does that count as one hour’s work or three? Also high are the costs put on this work. Legal & General has scrupulously used figures from the Office of National Statistics to put an hourly rate on these jobs. In reality, a goodly portion of this work would be done cash-in-hand at a lower rate. Who really pays tax and NI on behalf of their cleaner or gardener? When cash is tight you use mini cabs not chauffeurs. But even if the survey is perhaps a little unworldly, the message behind it is still rock solid. Financial protection, such as life cover, critical illness insurance and income protection insurance, needs to be planned with an eye on the whole family, not just the wage earner. Those in full-time employment are most likely to have some kind of cover with their job. So while many financial advisers prudently encourage them to top up the basic four times salary, it is worth asking about the rest of the clan too. The cost of this need not be prohibitive. The Life Insurance Market Research Association (LIMRA) recommends we carry life cover of 15 times salary, giving a lump sum which can be invested to produce a sustainable annual income. It raised this from 10 times salary last year, partly to reflect falling investment returns and partly to help sell more insurance. Actuarially, 13.5 times salary would more than match the fall in investment returns. But putting such quibbles aside, is the true worth of a mum 15 times her unpaid work of #19,651, a grand total of #294,765? Or is it the cost of insuring her life for that sum, a more reasonable #16 per month for a 29-year-old non-smoker buying 20 years of term cover from L&G? Maybe, once you do the arithmetic, life insurance is the most romantic Mothers’ Day present money can buy. – Stephen Womack is a reporter with Financial Mail on Sunday