The new school year is underway after the long summer break. This can be an expensive time for families. Most parents will have faced significant costs in recent weeks, from holiday childcare to new school uniforms. But to what extent are different families able to meet those costs? Every year for the past eight years, we have published research on what it costs to raise children from birth to age 18. This year the research coincides with the Spending Review, and puts a spotlight on how the government does support, and how it should support, families with the extra costs of children.
The most alarming finding from this year’s research is that lone parents are facing a growing gap between their income and their costs. Lone parents working full time for the minimum wage (what the government calls the ‘national living wage’) are 21 per cent (£80 a week) short of what they need for their family to reach a decent minimum living standard – as defined by the public. This gap has more than doubled since 2012. Even lone parents working full time on median earnings can’t reach this no-frills living standard. Their shortfall has risen from 6 per cent in 2012 to 16% today.
Why have things got so bad for lone parents? We thankfully don’t hear the same lone parent-bashing of previous decades, and yet despite this government policies are disproportionally affecting these families. Lone parents have been particularly hard hit by cuts and freezes to universal credit and tax credits, which top up earnings. At the same time, costs like childcare (which now makes up nearly half of all the costs of a child), public transport and food have risen much faster than inflation. This combination of falling income and rising costs make it very clear to see why many lone-parent families cannot afford a no-frills standard of living for their children. This equation is very simple and easily solved. The government must re-invest in support for children.
As part of today’s Spending Review, we are calling on the Chancellor to:
- Restore both the child element in universal credit to its 2015/16 value and the higher amount for first children.
- Increase child benefit by £5 per child per week to restore this vital lifeline to its 2013/14 value.
- Lift the two-child limit. In our recent report on changes needed to universal credit, of all the changes we modelled, removing the two-child limit would lift the most children from poverty per pound of social security spending.
- Remove the benefit cap, which affects many lone parents of young children who are least able to escape the cap through work.
- Prioritise a national childcare strategy, including a comprehensive extended schools programme, to ensure cost, quality and availability of childcare are not a barrier to work.
This approach will help all families with children, and particularly support lone parents. It is right that all families get decent support with the costs children bring, so that we as a society can ensure all children have happy, healthy childhoods and get the best start in life.