Sharp fall in living standards for lone parents

The report by Loughborough University for the Child Poverty Action Group has found that the gap between lone parents’ income and what they need to achieve a reasonable standard of living has grown sharply, with income gaps more than doubled in six years for some.

Working lone parents on reasonable pay are unable to reach a decent living standard even if they work full time, it claims.

For lone parents with young children that are not working, they are 40 per cent short of a decent minimum living standard, equivalent to £158 less than they need.

In 2019 the overall cost of a child up to the age of 18 including rent and childcare is £185,000 for lone parents (up 19 per cent since 2012) and £151,000 for couples (up 5.5 per cent 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 on the NLW are £80 a week short of what they need, a gap that has more than doubled to 21 per cent from 10 per cent since 2012.
• Even lone parents working full time on median salaries are unable to reach a decent living standard, with a shortfall of £60 a week, a gap that has grown from 6 per cent in 2012 to 16 per cent.
• For lone parents working part-time on the NLW, the income gap has risen from 12 per cent to 24 per cent, and is now £92 a week.

CPAG says that ‘a toxic mix’ of a the freeze on working age benefits, cuts to tax credits and universal credit, stagnant wages and sharp rises in the cost of some essential food, public transport, fuel, council tax and childcare costs, have left all families on the National Living Wage short of what they need for a basic standard of living.

The report Cost of a Child in 2019  - the eighth report in an annual series - is by Professor Donald Hirsch, director of the Centre for Research in Social Policy, where he leads the Minimum Income Standard for the UK programme.

CPAG said it uncovers drastic and growing income shortfalls for working lone parents, whether they are on the National Living Wage or median earnings. (The ‘national living wage’ is £8.21 per hour. Median earnings are £12.78 per hour.)  

The report looks at the needs of different family types and is informed by what ordinary members of the public feel is necessary for both couples and lone parents bringing up children.

The costs of a child are calculated according to a minimum standard of income that covers the costs of essentials such as food, clothes and shelter as well as other costs necessary to participate in society.

The report finds that with no increase in cash terms in child benefit since 2015, (but a return of inflation since 2016), child benefit now covers less than a sixth of the cost of a child for a lone parent and barely a fifth for a couple.  

For families receiving maximum child tax credit and child benefit (i.e. those either not working or working low hours) the overall benefit package for children now falls 30 per cent short of covering the extra cost associated with having a child for lone parents (up from 22 per cent in 2012).

Chief executive of Child Poverty Action Group Alison Garnham said, ‘Back in the early noughties politicians declared that the war on lone parents was over. But the evidence suggests that it isn’t. Lone parents have taken particularly big losses following cuts to universal credit and tax credits and the freeze on family benefits - such that a decent, no-frills living standard is out of reach even on a reasonable wage. That’s a divisive economy, not one which works for everyone.’

Report author Mr Hirsch said, ‘We have now seen a full decade in which family costs such as childcare, transport and food have seen substantial rises, whereas the incomes of many families have largely stood still. For some families this has hurt more than others, but an unfortunate aspect of this period of austerity is that it has tended to hit hardest among families who face the greatest challenges.

‘Those supported only by a single parent, those with more children to support and those with fewer working hours have tended to see their living standards fall the most.  This is the opposite of the principle that people with the broadest shoulders should take on more of the burden of austerity. A lot of work needs to be done to restore a social security system designed to protect the worst off.’

Ms Garnham added, ‘In the UK we believe that every family should have a living standard that at least meets people’s needs, but after years of social security cuts, families on the so-called National Living Wage can’t achieve a decent minimum living standard, even if they work full time – and lone parents are suffering the most. For them, trying to reach a decent minimum living standard is like chasing a moving target. 

‘Our new Prime Minister wants to unite the country. Will he then commit to restoring the value of family benefits for working and non-working households and make sure that they once again rise with inflation? That would begin to close the income gaps that austerity caused – and is still causing – to the families least able to withstand them.’