DRASTIC INCOME SHORTFALLS FACED BY WORKING LONE PARENTS IN SCOTLAND AND ACROSS UK | CPAG

DRASTIC INCOME SHORTFALLS FACED BY WORKING LONE PARENTS IN SCOTLAND AND ACROSS UK

Published on: 
04 September 2019
  • even those working full time on average pay cannot achieve a decent living standard
  • income gaps have more than doubled in six years for some

Lone parents on reasonable pay cannot reach a minimum acceptable living standard – as defined by the public - even if they work full time, new research for Child Poverty Action Group (CPAG) shows.

The research, The Cost of A Child in 2019, by Loughborough University for CPAG, uncovers drastic and growing income shortfalls for working lone parents whether they earn the ‘national living wage’ or have median earnings. (1) While anti-lone parent rhetoric may have abated in recent years, CPAG warns, the UK government’s 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.

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, the research finds.

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).

Childcare costs, for those requiring childcare, now comprise nearly half of all the costs of a child reported in The Cost of a Child 2019.

Lone parents:

The gap between lone parents’ actual income and what they need to meet family needs has grown sharply:

Lone parents working full time for the so-called 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.

Even lone parents working full time on median earnings can’t 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 with young children who are not working fall over 40% short of a decent minimum living standard: they have £158 less than they need.

Director of Child Poverty Action Group in Scotland John Dickie said:

“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.

“The recent Scottish Government announcement of a £10 a week Scottish Child Payment for children in lower income families is hugely welcome in the face of these rising costs, but action is needed at UK level too. The UK government must as a matter of utmost urgency commit to restoring the value of family benefits for working and non-working households and make sure that they once again rise with inflation.”

"Scotland and across 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."

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 from Loughborough University’s Donald Hirsch, is the eighth report in an annual series.

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 (ie 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.

Author of the report Professor Donald 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.”

 

Note to Editors:

  1. 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. For further information, see www.lboro.ac.uk/research/crsp/mis. Author of the report Professor Donald Hirsch is Director of the Centre for Research in Social Policy, where he leads the Minimum Income Standard for the UK programme. An embargoed copy of the report is here

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

  1. CPAG’s Austerity Generation report, published in November 2017, (P. 19, 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
  1. 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.

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.

Journalists can contact John Dickie, Director of CPAG in Scotland on: