New CPAG research shows childhood getting more expensive

September 4, 2012

As parents face back-to-school costs, new research published today by Child Poverty Action Group and funded by the Joseph Rowntree Foundation details the costs of meeting the minimum basic needs of a child in 2012.

Key findings from the research:

  • It costs £143,000 in total to bring up a child to age 18 and meet their minimum needs, which is around £150 a week (averaged for a child across all ages and including childcare costs and housing). (Chapter 5)
  • The basic cost of raising children has risen faster than inflation (CPI) in recent years, meaning that with wages falling behind and benefits being cut, Britain is moving backwards for the prosperity of our children. (Chapter 7)
  • Childcare can add as much as £60k to the total cost of childhood. Childcare is one of the factors most responsible for the costs of children’s needs rising faster than inflation. The main state support for childcare costs is through tax credits and it was cut by 12.5% in April 2011. (Chapter 5)
  • State support fails to ensure basic physical needs are met, leaving many families lacking sufficient funds for a healthy diet for the whole family and living in unhealthy housing conditions with problems like overcrowding and damp (Chapter 3). The maximum support available only meets between 73% and 94% (depending on family composition) of basic costs for children. (Chapter 6)
  • A full-time job on National Minimum Wage is not enough to meet minimum costs for children.  For single parent families, NMW leaves them with 89% of the basic requirement; and for couple families it is just 82% of the basic requirement (this is after benefits and tax credits have been included). (Scorecard and Executive summary)
  • Child Benefit meets only 20% of childhood costs on average for couple families and just 18% for single parent families. Child Benefit has been frozen since 2010 and will have lost 10% of its value by 2014. Since the war, universal support with the cost of a child, first through family allowances and then child benefit, has been our national public commitment to all children. This universal arrangement will come to an end next year. (Scorecard and Chapter 6)

Alison Garnham, Chief Executive of Child Poverty Action Group, said:

'The research paints a stark picture of rising costs for bringing up children at a time when the Government is cutting its contribution to children’s costs and wages are stagnating.

'Every parent knows it’s getting harder to afford the things their children need, but it doesn’t feel like the Government is on their side right now. Ministers chose to make children and families the main target of their austerity agenda, cutting billions from child benefit, child tax credit, childcare credits and working tax credit. Even disabled children are having their disability additions slashed in half.

'It’s not just about support through benefits, there’s too many families stuck on low pay and low hours, and wages for the poorest have been falling behind for the last three decades. We need tough action from government to stop the rot and ensure that ‘a fair day’s pay for an honest day’s work’ is an option for everyone.

'We’re moving backwards and parents know it with their family budgets are squeezed from every side. The research is a warning that we’ve reached a dangerous turning point. Experts like the IFS now warn we’re on the brink of a dramatic rise in child poverty, leaving the Prime Minister in desperate need of a change of strategy to keep his promise to ‘make British poverty history’.

'While Universal Credit will help some low-income families, it can’t do all the heavy lifting – decent jobs, decent children’s benefits and more affordable childcare are also needed if we are to turn back the rising tide of child poverty.'

On the importance to the economy, Alison Garnham added:

'The cuts to support for children are a disaster for economic recovery and Britain’s long term prosperity. We need fresh thinking from the Coalition to target stimulus through children’s benefits if we want a stronger economy and thriving families. If every child in Britain grows up healthy, well-educated and an active participant in their community, we will all benefit from the future prosperity. This was well understood by the post-war generation who prioritised universal benefits for all children despite being much deeper in debt than we are today. Now would be a good time to renew our national commitment to all our children.'

Chris Goulden, Head of Team (Poverty) at Joseph Rowntree Foundation (JRF), which funded the research study added:

'Bringing up children has never been cheap, that’s a constant and clear message that you will hear from any parent.  But what this research shows, for the first time, is the cost of giving a child a minimum acceptable standard of living, from birth to age 18. Previous studies looking at this issue have been flawed because they are based on arbitrary judgements about what to include and use figures from what parents spend on their children, not what parents agree their children need to participate in society.

'One of the key findings from our research is the changing spending needs of families. For example, as the availability of public transport declines and its cost rises, the families who take part in the research say, for the first time, that a car is now essential. This brings additional financial burdens to parents - an issue that JRF highlighted this summer in our major Minimum Income Standards report.

'Speaking directly to groups of parents for this research, they were clear that not being able to afford to take part in school activities, go to birthday parties or have a modest annual family holiday will have serious consequences for the development of their children. That’s an issue that both policy makers and politicians need to be mindful of as we continue to negotiate hard economic times. A priority should be addressing the declining living standards of people on low incomes through employment growth in the areas that need it and provision of affordable goods and services – particularly childcare – to parents and their children.'

ENDS

Notes to Editors

  • Full report and Scorecard for Cost of a Child 2012: see pdf attachment at top right of this page.
  • Further findings from the research:
    • Having children leaves adults on benefits worse off. Additional state support for families with children is lower than a child’s minimum needs, so families face a growing shortfall with each child. Parents react by spending less money on themselves; in some cases parents will even skip meals so that their children don’t go without. If a single parent of three children used his/her adult benefit income to top up the child-related benefits so the minimum needs of the children are met, they would have just £12 a week to meet their own basic needs. (Chapter 6)
    • The cost of a child rises as they get older (excluding childcare costs). This is because of increased consumption needs – e.g. more food – and also because people believe children are less able to share a room with younger siblings once they reach adolescence. (Chapter 5)
    • Costs are higher for single parents and, since cuts were implemented in 2010, the deterioration in income for single parents is worse than for couple families. A single parent has £107 less than they need and £166 less if they have three children. (Chapter 5)
    • Parents have modified their own expectations since the recession with fewer meals out and fewer presents for each other. Parents clearly prioritise children’s needs over their own. All acknowledge that life changes when you have children, you make more sacrifices, eat out less, life is less spontaneous and holidays abroad often come to an end. Parents also have less time available. (Chapter 4)
  • Cost of a Child (2012) is the first in a series of annual reports that will in future years allow tracking of annual changes to:
    • the minimum basic cost requirements for children
    • the different drivers of childhood costs (e.g. childcare, transport, housing, education, social participation)
    • the adequacy of social support for ensuring basic costs are met
    • the relationship between children's costs and headline inflation
    • parental attitudes on family spending requirements.

It will be published by Child Poverty Action Group each September, so please note in your future planning.

  • After years of significant progress reducing UK child poverty, it is now predicted by the IFS to rise substantially, as per the table below:
    before housing costs after housing costs
Baseline year 1998/99 3.4 million 4.4 million
Latest official figures 2010/11 2.3 million 3.6 million
IFS estimate for 2014/15 2.9 million  
IFS estimate for 2020/21 3.3 million  
Govt target for 2020/21 1.3 million* n/a

            * 10% of children based on 2010/11 population count

Sources: HBAI 1998/99-2010/11; Child and Working-Age poverty from 2010 to 2020, IFS 2010.

  • For more details on the IFS predictions of sharp rises in child poverty as a consequence of the Coalition’s policies, see their report Child and Working Age Poverty from 2010 to 2020: (http://www.ifs.org.uk/comms/comm121.pdf).
  • CPAG is the leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.
  • CPAG is the host organisation for the Campaign to End Child Poverty, which has over 150 member organisations and is campaigning for public and political commitment to ensure the goal of ending child poverty by 2020 is met.

For further information, or to request an interview with a spokesperson or the lead researcher, please contact:

Tim Nichols

CPAG Press Office

Tel. 020 7812 5216 or 07816 909302 

tnichols@cpag.org.uk

www.cpag.org.uk

 

Gary Rae

JRF Press Office

01904 615950 or 07800 615105

gary.rae@jrf.org.uk

www.jrf.org.uk