21 Sep 2016
New report finds parents on minimum wage cannot meet basic family costs
New report finds parents on minimum wage cannot meet basic family costs
Parents working on the ‘national living wage’ still can’t earn enough to provide an acceptable minimum living standard for their children, warns a new report by Loughborough University.
Produced by Professor Donald Hirsch for Child Poverty Action Group, the Cost of a Child in 2016 report draws on what the public says every family requires to meet its basic needs and to participate in society. It is based on a series of calculations, supported by Child Poverty Action Group and the Joseph Rowntree Foundation, systematically monitoring the cost of a child.
Pressure on family budgets looks set to intensify for low-income families, with childcare and housing costs increasingly the deciding factor in whether parents can achieve what the public regards as a minimum standard of living, the report concludes.
Families with two parents working full time on the ‘national living wage’ are 12% short of the basic amount needed for a minimum standard of living – as defined by the public – the report shows. That’s a gap of £50 per week (but a fall on 2014-15 from 16%). For these families, disposable income as a percentage of minimum family costs has grown by 4% since 2012.
For lone parents working full time on the national living wage the shortfall is worse. They are 16% short of what is needed for a minimum living standard (up from 13% in 2014- 15) – a gap of £55 per week. For these families disposable income as a percentage of minimum family costs has fallen by 6% since 2012.
The report finds the minimum cost of a child from birth to 18 is now £151,600 for a couple – a slight increase (1.2%) on 2014-15. For lone parents the cost is £182,589 – a 9% jump on the previous year.
For out-of- work families with two children the gap between their income and the amount needed for a minimum living standard is stark: couples families are 39% short, lone parent families 37%.
Child benefit plus maximum child tax credit together cover only 72% of the costs of a child for lone parents. The percentage for couple families is 98%.
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