Rising price of childcare pushes up cost of living for families

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A couple with two children need to earn a minimum of 36,800 to be able to have an adequate standard of living in the UK, according to a new report.


The research by the Joseph Rowntree Foundation (JRF) found that the minimum amount a couple with two children need to make for a socially acceptable standard of living has risen by nearly a third since 2008, because of soaring childcare and transport costs and cuts to tax credits.

Two parents need to earn at least £18,400 each, or £36,800 if only one parent works, to support themselves and two children in 2012, an increase of £5,000 on 2008 when the JRF’s first report was published.

According to the report, ‘A Minimum Income Standard for The UK in 2012: Keeping up in hard times’, minimum costs of childcare have risen by nearly a third since 2008, based on the Daycare Trust’s Childcare Costs Survey, and childcare is now families’ single biggest weekly outgoing.

Parents taking part in the research also agreed that public transport is expensive and not sufficiently flexible and reliable to meet the needs of families with children.

Many families living in urban areas outside of London said that a car has become essential to meet an acceptable living standard.

Cuts to tax credits have also had a negative effect on families despite the benefit of higher tax allowances, says the report.

The JRF found that for single people to reach an adequate standard of living, they need to earn £16,400 a year before tax, while the figure for a lone parent with one child is £23,900.

The report points out that a quarter of the UK’s population live below the minimum income standard, three million more than in 2008.

It concludes that while the minimum needed by families for an acceptable living standard remains similar in difficult economic times as it did previously, it is getting harder to earn enough to meet this standard.

The report goes on to say that the gap between the incomes and needs of the worst-off households is widening, and warns that the level at which the Universal Credit will be set will strongly influence the ability of households on low-incomes to reach a minimum acceptable standard of living.

Julia Unwin, chief executive of the JRF, said, ‘Families have a monumental task trying to earn enough to get by. Parents facing low wages and pressure on their working time have little prospect of finding the extra money they need to meet growing household expenses.

‘This year's research shows that a dangerous cocktail of service cuts and stagnating incomes are being keenly felt by parents. Many working people face the risk of sliding into poverty. It illustrates how anti-poverty measures are needed to address not just people’s incomes but also the costs that they face.’

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