One in five parents in dire financial straits amid ‘cost-of-children crisis’, report shows
Action for Children has warned that the UK is in the midst of a ‘cost-of-children crisis’ after it found that by almost every financial measure, families with children have been among the hardest hit by the country’s high inflation.
The charity’s analysis of data from the abrdn Financial Fairness Trust’s survey of more than 5,000 UK households showed that in May 2023, one in five (19%) homes with children were classed as being in ‘serious financial difficulty’ – the most severe form of financial insecurity. This was 6% higher than those without children (13%).
Action for Children found that compared to households without children, families with children were:
- Six times more likely to have had a pay-as-you-go energy meter installed and to have turned to informal lenders or loan sharks (6% v 1%) in the six months between November 2022 and May 2023
- Three times more likely to be behind on household bills (29% v 9%) or debt repayments (25% v 7%) and
- Twice as likely to be behind on rent or mortgage payments (10% vs 4%), or to have gone without food when hungry (15% v 8%) or missed multiple meals (9% v 5%) in the preceding month
Single parents fared the worst, with a quarter being in ‘serious financial difficulties’ – higher than any other family type.
Action for Children called on the government to protect low-income families by increasing social security levels in line with inflation at the Autumn Statement and to reform future cost of living payments to take family size into account. The charity also called for an increase to the child element of Universal Credit and the scrapping of the Benefit Cap, both of which would lift more than 300,000 children out of poverty.
Paul Carberry, chief executive at Action for Children, said: ‘Our stark findings show the UK is in the midst of a cost-of-children crisis, where a parent penalty premium makes every day a battle for low-income families just to stay afloat.
‘With more mouths to feed, clothes to wash, rooms to heat and typically fewer savings, families with children are especially vulnerable to financial shocks, and that pressure is being felt most by those on low-incomes, and single parents in particular.
‘The cost-of-living crisis is far from over as prices across the economy are still rising with food inflation remaining particularly high at almost 14%. The Bank of England does not expect to reach its 2% inflation target until early 2025, and energy prices remain volatile and stubbornly high as winter draws near.
‘Every day, our frontline workers are applying to our crisis fund for emergency grants to support low-income families in their care with basics like food, clothing, and utility costs. The chancellor must act at the Autumn Statement to protect families with children from these intense and ongoing pressures on household finances. At the very least, we must see benefits rise with inflation and cost of living payments reformed to take family size into account.’
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