Cost of a child

Politicians are always concerned about public opinion, and they often seek to shape it. But, despite their efforts, we know that public policy and public opinion do not always match, and two pieces of recent research illustrate this clearly. In July the latest British Social Attitudes Survey was published, and showed strongly that the public thinks the government should financially support those in low paid work. As Ben Baumberg Geiger has pointed out on his blog, support is rising for more financial support for working parents on low incomes – 58% were supportive of this in 2011, and 66% in 2017. While the government does support parents on low incomes to a point, benefit freezes and cuts to the work allowance in universal credit have undermined this intention. Further, we know that the support families get comes nowhere close to meeting the additional costs of raising a child, as CPAG’sCost of a Child report, out today, reveals.

Our Cost of a Child report reveals how much it costs to raise a child to the age of 18, and is based on the minimum income standard – the public’s view on the income people need in order to reach an acceptable, but no-frills, standard of living in the UK. The overall cost of a child is £150,753 for a couple and £183,335 for a lone parent.

If you are a family of four, with two parents working full time for the ‘national living wage’, you will be 11% short of what you need to meet these costs. If you’re a lone parent in the same situation, you’ll be 20% short. The government may celebrate its ‘national living wage’ – but it clearly doesn’t merit the name, as it doesn’t meet the cost of living for people with children. Any gains from a rise in the minimum wage have been clawed back through the freezing of in-work benefits. Pay and government top-ups are simply not enough for families.

Single parent families are especially hard hit by cuts and freezes to our social security system, and they’re particularly affected by the high cost of childcare. A lone parent working full time on the average (median) wage will still be 15% short of an adequate income. It’s no wonder that 49 per cent of children in lone-parent families are growing up in poverty.

The government first introduced the working-age benefit freeze when inflation was very low – so the cost of living was rising slowly. That’s not the situation we’re in now, and the freeze is really biting. The cuts to the work allowances in universal credit have been discredited by many including the people who designed it. One thing to celebrate is the government’s focus on increasing childcare support – including covering up to 85% of costs in universal credit. But there are problems: reporting requirements are complex and because universal credit is paid in arrears, it is hard for parents to pay childcare fees in advance. And as for the free early years entitlement for 3 and 4 year olds – also to be celebrated in principle - parents can face difficulties finding nurseries and childminders offering this. Childcare therefore remains a major strain on working low and middle-income families. Full-time childcare costs around £80,000 over the course of childhood, making up around half of the total costs of bringing up a child.

All these constraints on working families are affecting childhoods and life chances. And I’ve not even touched on the two-child limit, ‘bedroom tax’ or local rent limits. Growing up in poverty means childhoods filled with worry and children missing out on things most take for granted, with the effects lasting well into adulthood.

The government focuses on increasing employment levels – something undoubtedly worth celebrating. But when pay is too low, the public wants the government to act to support families. The freeze on benefits and cuts to universal credit work allowances are not in step with public opinion. We all recognise the costs involved in raising a child in 2018 – the government needs to catch up and ensure families get the support they need.