Low-income parents relying on child benefit for household basics | CPAG

Low-income parents relying on child benefit for household basics

Published on: 
31 August 2020

As many families prepare this week for a uniquely expensive return to school after lockdown, new research shows that in recent years parents have increasingly had to use their child benefit to cover utility bills and other bottom-line household costs.

The research, from Child Poverty Action Group (CPAG), is based on a survey of 1,000 parents receiving child benefit in summer 2020. The findings were compared with the results of a similar survey conducted in 2012.

Parents were asked to select all items or services they used part or all of their child benefit to pay for.

Key survey findings 2020:

  • 28% of parents receiving child benefit said they now spend it on day-to-day living/general expenses, up from 2 per cent in 2012
  • 14 per cent reported spending child benefit on bills, up from 4 per cent in 2012
  • 33 per cent are spending it on food in 2020, up from 26 per cent in 2012
  • Fifteen per cent of parents today spend child benefit on baby products/formula milk/nappies/wipes compared to 9 per cent in 2012
  • Today just less than a quarter (23%) spend it on clothes/shoes for children (down from 51% in 2012).

The 2020 survey shows that many families depend on child benefit and that parents value the fact that most families receive it:

  • 37 per cent said they couldn’t manage without it.
  • Almost three quarters (74 per cent) said every family should be treated equally when it comes to child benefit.

Child benefit has lost 23% of its value since 2010 because of freezes and sub-inflationary uprating*. Parents earning under £60,000 are eligible for the benefit, but because of the high income child benefit charge, it is reduced by 1% for each £100 earned over £50,000. Because this threshold has not been uprated, more families lose out every year. In 2013/14 when the charge was introduced, 13% of families lost at least some child benefit. In 2019/20 it is estimated that 18% of families (1.4 million) were affected by the charge and of these 1 million will have lost all of their entitlement**.

Child Poverty Action Group is calling for a £10 weekly increase in child benefit to ensure that parents can protect their children from hardship. While the pandemic has made finances even tighter for families – with many facing income drops just as their costs climbed because children were at home during school closures – there was no targeted extra support for children in the Government’s economic response, besides a temporary extension of free school meals replacement vouchers.

Commenting on the survey findings, Chief Executive of Child Poverty Action Group Alison Garnham said:

“This week especially many parents will be worrying about whether they’ve got enough money to meet their children’s needs as they face an exceptionally expensive post-lockdown return to school. Some will have been asked to supply masks and learning equipment and packed lunches for the school day, and almost all will have to buy new shoes and uniforms for children who’ve outgrown their old kit after months at home.

“In the period ahead, as the coronavirus recession takes hold, we are likely to see many more families falling into hardship and many more parents struggling to stop their children from slipping into poverty. Yet there was nothing in the Government’s economic response to the pandemic that offered ongoing targeted financial support for children.

“For almost 50 years, child benefit has been there for children as a minimum protection against poverty but its value has been eroded and as our survey shows, hard-pressed parents are increasingly having to spend it on general household essentials. That isn’t right. As a nation we invest in the state pension to support everyone in retirement, we should be investing just as much in child benefit to support all families with the extra costs of children. Re-investing in child benefit is the least we can do to shore up children’s life chances in these uncertain times.”

Notes to Editors:

* CPAG Author’s calculation from Child Benefit and Guardian’s Allowance: Rates and tables, Revenue Benefits; Retail Price Index, Office for National Statistics.

** ‘Stealthy changes mean that soon one in five families will be losing some child benefit’, IFS, 2019

CPAG commissioned Survation to poll a representative sample of 1,055 UK parents who receive child benefit in Summer 2020.

In February 2012 CPAG commissioned Populas to poll a representative sample of 642 parents – reported in the CPAG publication 'Save Child Benefit'.

Child benefit is currently £21.05 per week for an eldest or only child and £13.95 for any additional children. Parents earning more than £50,000 can receive child benefit but must pay a high income charge. The high income child benefit tax charge applies if someone in the household is earning more than £50,000. The charge is equal to one per cent of a family’s child benefit for every extra £100 of income that is over £50,000 each year. If an individual’s income is over £60,000, the charge will equal the total amount of the child benefit.

Today’s survey follows another conducted by CPAG and the Church of England which showed the financial impact of COVID-19 on low-income families. In that survey, nearly 9 in 10 respondents reported spending substantially more during the lockdown on food, electricity, and other essentials – usually because they have been at home much more. And for this group, money was tighter – 76 per cent of respondents said the coronavirus has affected their ability to pay for food (83%) and utilities (76%) and child-related costs (e.g. nappies or baby products, children’s clothes - 53%).

CPAG’s Cost of Learning in Lockdown report also showed the additional costs of home learning. 

As schools are opening back up to all, families will face paying for additional expenses but many will have less income as they have not been able to work while the schools were closed. Alongside the usual high costs of school (e.g. certain uniforms) there are going to be additional costs of this academic year, including requirements in some schools for children to bring in their own equipment. Parents have also told us that having been left high and dry and lacking equipment for home learning, many are buying resources for home learning in case of a local lockdown.

CPAG press office: 07816 909302