Cost of raising a child hits £150,000

Recent research conducted by the Child Poverty Action Group (CPAG), has revealed some families could face financial hardship, as the cost of raising a child, to the age of 18, has hit £150,000.

The report reveals:

 

• It now costs £148,000 to raise a child to the age of 18
• The cost of raising a child has risen by 4%
• The value of both child benefit and tax credit fell in real terms last year
• Families with children are at higher risk of falling into poverty, than those without

Families facing financial strife

The report also revealed a number of groups are facing a shortfall in income, which could also lead to financial hardship.

Families claiming out of work benefits are also likely to experience financial hardship with the average two parent family, only receiving income equivalent to 58% of their needs. For single parent families the figure rises slightly, to 61%.

Meanwhile, unsurprisingly low earners also face a shortfall, as the report reveals workers in a coupled family, who earn the national minimum wage, will only take home 83% of the amount required to cover minimum costs. Lone parents on the minimum wage will have slightly more, with 87%.

Along with large financial shortfalls, working families also need to cope with the ever rising cost of childcare, which has increased by 5.9% over the past year. This provides yet another problem for lower income families, many of whom are now required to pay council tax.

Furthermore, some families are due to receive another setback when Universal Credit is introduced in October, which may leave both single and coupled families facing even larger shortfalls.

Alison Garnham, Chief Executive of the CPAG, said: “This research paints a stark picture of families being squeezed by rising prices and stagnant wages, yet receiving ever-diminishing support from the government over the course of the last year.”

“Every parent knows it’s getting harder to pay for the essentials their children need, and they don’t feel like politicians see them as a priority. Child benefit and child tax credit have been cut at the very time families need them most. Families are getting worse off and parents know it.”

“If every child in Britain can grow up healthy, well-educated and an active participant in their community, we all benefit from a more prosperous economy. 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.”

She concluded: “As we move towards a ‘living standards election’, now would be a good time to renew our national commitment to all our children.” (Source: CPAG)

Katie Schmuecker, Policy and Research Manager at Joseph Rowntree Foundation, said: “This research looks at how much it costs parents to give their children a standard of living that the public think is the minimum acceptable. The task of making ends meet for families with children has always been hard, but is getting harder, and balancing family budgets has become a perilous and delicate act for hard-pressed parents.”

“Flat lining wages, cuts to benefits and tax credits and the rising cost of essentials is creating a growing gap between income and needs.”

“The next election is likely to be the first since the 1930s where living standards are lower than the last poll. All parties must go to the country with policies and a commitment to help the prospects of low-income families.”

She concluded: “The risk and costs otherwise are enormous. Child poverty costs the Treasury £29 billion a year, a price we can scarcely afford to pay, particularly in the current economic context.” (Source: CPAG)