Universal credit (UC) is now the main working-age benefit in the UK. Since its inception, UC has been plagued with administrative issues and budget cuts and, as a result, its early promise to reduce poverty has yet to be realised. When the pandemic hit, swift changes were needed to make UC fit for purpose including an increase in the amount of financial support provided and a relaxation of some of its most punitive rules. However, the vast majority of these positive changes have already been reversed, or are due to be reversed in the coming months.
This report draws on evidence from studies of minimum household costs in London to comment on the size of differences in children’s costs in various categories. This analysis builds on new research on a ‘Minimum Income Standard for London’.
In August, Child Poverty Action Group and the Church of England published a report, Poverty in the Pandemic, which offered a glimpse into the lives of low-income families trying to survive the impact of the coronavirus pandemic. This report provides an update on how families with children are managing financially, based on an additional 393 online survey responses received in the period since the last report was published, up to the end of November 2020.
The year 2020 has put unprecedented pressures on families bringing up children. Parents across the world have taken on new challenges due to the coronavirus pandemic in keeping their children healthy and safe as well as properly fed, educated and entertained at a time when they have been required to stay at home, and when many families’ livelihoods have been threatened. Our cost of a child report looks at what items families need to provide a minimum socially acceptable standard of living for their children in 2020.
Prior to COVID-19, there were more than four million children living in poverty in the UK – that’s nine children in a classroom of 30. In London, that number rises to 11. While the full economic impact of the pandemic is yet to be seen, we know that low-income households are bearing the brunt, and for families living in the capital things are likely to get worse before they get better. Even prior to COVID-19, the high cost of rent, childcare and travel made it very difficult for London families on low incomes to cover basic costs. In addition, families with children have been hit the hardest by cuts to the social security system, squeezing family budgets even further. In the face of this, our public services have a crucial role to play in tackling child poverty and ensuring children and families recover from the pandemic.
To understand the impact of child poverty on the lives of children and families in England better, CPAG, the Child Welfare Inequalities Project (CWIP) and the Association of Directors of Children’s Services (ADCS) conducted a survey of social workers between January and March 2020 to ask them about the experiences of the families they work with.
This report has been developed by the A Different Take London panel. We are a group of children, young people and parents with experience of living on a low income, and people from Child Poverty Action Group and the University of Leeds. Between January–June 2019 we have been discussing our own experiences and priorities and talking to the people in our communities, to develop our own agenda around the most important issues affecting the lives of people in poverty and what we think should be done about them.
Tower Hamlets has the highest rate of child poverty in the UK: 57 per cent, after housing costs are taken into account. In 2017, Tower Hamlets became one of the first boroughs in London to become a universal credit ‘full service’ area. The London Borough of Tower Hamlets commissioned CPAG to research the experiences of families with children in receipt of universal credit.
Our annual Cost of a Child report this year finds that the overall cost of a child up to age 18 (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 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.