Crisis in living standards for families as costs soar above incomes

As the summer holiday stretches family budgets even further, new research shows the cost of raising a child.
Summer can be an expensive time of year if you have school age-children. Not only are there six weeks to fill with activities and entertainment, extra childcare is needed for those who work.

For low-income families whose children receive free school meals, suddenly money has to be found for three rather than two meals every day. And as the return to school looms on the horizon, thoughts begin to turn to the school supplies and uniform needed for the new term. You don’t need to tell parents that having children is an expensive business – they already know.

Nonetheless, new research published today by JRF and the Child Poverty Action Group (CPAG) quantifies quite how expensive it is to raise a child: to be precise it adds £148,000 to a household budget over 18 years (£160 a week). This is the cost of giving a child what the public think is the minimum acceptable standard of living.

Even outside of the additional costs of summer (which are included in Loughborough University’s calculations anyway) it is getting harder for families to make ends meet. While the cost of the things required to give a child a decent standard of living increased by 4 per cent over the last year, the minimum wage only went up by 1.8 per cent, and average earnings by 1.5 per cent. There is a growing gap between the costs faced by families and their incomes.

Making ends meet is harder still for people who rely on benefits and tax credits. In 2013, for the first time since the 1930s, safety net benefits did not rise in line with inflation. Instead, most benefits and tax credits were only uprated by 1 per cent. Meanwhile child benefit remains frozen.

In recent decades the state has given extra help to families to offset some of the additional costs of children. This has been in recognition that it is in all of our interests for children to grow up with a reasonable standard of living. But that support for families has been reduced in this period of austerity. When combined with the rising cost of living, the result is that families are struggling.

The research into the cost of a child calculates the gap between the incomes of different sorts of families and what they need for a decent standard of living in 2013. A working couple, both working full-time on the minimum wage, with two children, can only afford 83 per cent of a decent standard of living for their family (87 per cent if they’re a lone parent). For those entirely reliant on out-of-work benefits, a couple with two children will only have 58 per cent of what is needed for a decent standard of living (a lone parent has 61 per cent).

The return to school in a few weeks may take some of the immediate pressure off family budgets. But the growing gap between family incomes and what families need for a decent standard of living shows no signs of abating.

Read more about Minimum Income Standards.
http://www.jrf.org.uk/topic/mis