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Working lone parents cannot achieve a decent standard of living due to cuts to benefits and rises in everyday essential costs

  • Lone parents working full time on median earnings cannot reach a decent minimum living standard, falling £60 a week short. For them, the shortfall has risen to 16% from 6% in 2012
  • Lone parents working full time for the National Living Wage (NLW) are 21% (£80 a week) short of what they need – after paying for rent, childcare and council tax – a gap that has more than doubled from 10% since 2012
  • For those working half-time for the NLW, the income gap has jumped from 12% to 24% since 2012, and is now £92 a week
  • Lone parents with young children who are not working fall over 40% short of a decent minimum living standard: they have £158 less than they need

Lone parents who work full-time hours in reasonably paid jobs cannot afford a decent standard of living, according to new research by Loughborough University.

A report published today shows that despite earning an average wage (£12.78 per hour), single parents are still £60 a week short of what they need – after paying for rent, childcare and council tax.

Those earning the National Living Wage (£8.21 per hour) are £80 a week shy of reaching a decent minimum living standard.

The report, The Cost of A Child in 2019, was commissioned by the Child Poverty Action Group (CPAG), and was written by Professor Donald Hirsch, Director of Loughborough’s Centre for Research in Social Policy (CRSP).

The level of acceptable living, the Minimum Income Standard (MIS), is calculated annually by Prof Hirsch and CRSP and is based on what the public thinks is needed for a decent standard of living in the UK.

Prof Hirsch said: “We have now seen a full decade in which family costs such as childcare, transport and food have seen substantial rises, whereas the incomes of many families have largely stood still.

“For some families, this has hurt more than others, but an unfortunate aspect of this period of austerity is that it has tended to hit hardest among families who face the greatest challenges.

“Those supported only by a single parent, those with more children to support and those with fewer working hours have tended to see their living standards fall the most.

“This is the opposite of the principle that people with the broadest shoulders should take on more of the burden of austerity.

“A lot of work needs to be done to restore a social security system designed to protect the worst off.”

In 2019, the overall cost of a child up to age 18 years (including rent and childcare) is £185,000 for lone parents (up 19% since 2012) and 151,000 for couples (up 5.5% since 2012).

The various elements of child tax credit and child benefit have grown by between zero and 3% since 2012, whereas consumer prices have risen by 12%.

Childcare costs now comprise nearly half of all the costs.

Today, the Child Poverty Action Group has warned that social security policies have created disproportionately stark losses for these families and left them falling further and further below a living standard that the public considers acceptable.

The CPAG said “a toxic mix” of the freeze on working-age benefits, cuts to tax credits and universal credit, stagnant wages and sharp rises in the cost of some essential foods, public transport, domestic fuel, council tax and childcare, have left all families on the National Living Wage short of what they need for a basic, socially acceptable living standard – but single parents have fared worst.

Chief Executive of Child Poverty Action Group Alison Garnham said: “Back in the early noughties politicians declared that the war on lone parents was over. But the evidence suggests that it isn’t.

“Lone parents have taken particularly big losses following cuts to universal credit and tax credits and the freeze on family benefits - such that a decent, no-frills living standard is out of reach even on a reasonable wage. That’s a divisive economy, not one which works for everyone.

“In the UK we believe that every family should have a living standard that at least meets people’s needs, but after years of social security cuts, families on the so-called National Living Wage can’t achieve a decent minimum living standard, even if they work full time – and lone parents are suffering the most.

“For them, trying to reach a decent minimum living standard is like chasing a moving target. 

“Our new Prime Minister wants to unite the country.  Will he then commit to restoring the value of family benefits for working and non-working households and make sure that they once again rise with inflation?

“That would begin to close the income gaps that austerity caused – and is still causing – to the families least able to withstand them.”  

The costs of a child are calculated according to a minimum standard of income that covers the costs of essentials such as food, clothes and shelter as well as other costs necessary to participate in society.

It looks at the needs of different family types and is informed by what ordinary members of the public feel is necessary for both couples and lone parents bringing up children.

The Cost of a Child in 2019 is the eighth report in an annual series.

Other key findings:

Adequacy of children’s benefits compared to the additional cost of having children:

The Cost of a Child 2019 finds that with no increase in cash terms in child benefit since 2015, (but a return of inflation since 2016) child benefit now covers less than a sixth of the cost of a child for a lone parent and barely a fifth for a couple.  

For families receiving maximum child tax credit and child benefit (i.e. those either not working or working low hours) the overall benefit package for children now falls 30% short of covering the additional cost associated with having a child for lone parents (up from 22% in 2012).

For a child living with both parents, it falls less than 5% short, less than in 2012, influenced by a more modest assessment of minimum costs made by parents in the wake of years of austerity.

Adequacy of overall incomes for couples with children:

Parents in a couple who both work full time for the ‘NLW’, are 10% (£47 a week) short of a socially acceptable minimum living standard.

Where one parent works half time and the other full time (both on ‘NLW’), the shortfall is     14% (£64 a week).

Single-earner couples (on NLW) are 24% (£113 a week) short.

Like lone parents, couple-families who don’t work are over 40% (£203 a week) short of the budget they need for a socially acceptable minimum lifestyle.

Background information

(1)    CPAG’s Austerity Generation report (Figure 3.1.) found that lone-parent families have seen particularly dramatic reductions in support as a result of cuts made since the coalition era.

(2)    A single adult faces greater additional costs than a couple as a result of having a child, because certain additional costs, such as a family holiday and the cost of owning a second-hand family car, are similar whether there is one adult or two, but couples offset this by  saving more than single adults on other expenses when they become parents.  When people become parents some of their costs reduce – for example they spend less on leisure/cultural activities for themselves and on public transport.   The higher cost of a child for lone parents is influenced by the fact that couples make double  the savings on these reduced costs when they become parents (for example they save the cost of two train fares or two cinema tickets, rather than one ) while paying similar amounts for other costs such as running a family car and for  a family holiday.

(3)    The Cost of a Child research entails a sequence of detailed deliberations by groups of members of the public, informed by expert knowledge where needed. The research process involves agreement being reached by groups of members of the public, and then checked and rechecked by subsequent groups. Each group has detailed discussions stating its rationale for what should be included in a minimum household budget. The standard thus represents a considered, settled agreement on what is the minimum needed, rather than just a collection of subjective opinions held by individuals.

The costs in this release relating to whole families are calculated for a family with two children aged 4 and 7.

The various elements of child tax credit and child benefit have grown by between zero and 3% since 2012, whereas consumer prices have risen by 12%.

A review of changes in the minimum required for an acceptable living standard between 2008 and 2018 suggested that minimum household costs have grown substantially faster than Consumer Price Index, largely because certain essentials such as essential foods, energy and transport have risen more rapidly in price than goods and services generally – creating a higher rate of inflation for low-income families than the published CPI rate.

The National Living Wage is £8.21 per hour.

Median earnings are £12.78 per hour.

ENDS

Notes for editors

Press release reference number: 19/134

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