Kids are expensive. While that probably doesn’t come as a surprise, it might – and should – worry us that households with children are much more likely than other households to not have enough money for a decent standard of living.
New research out today by Joseph Roundtree Foundation and Loughborough University looks at how many households in the UK cannot afford an adequate living standard. 19 million people are living below this level and families with children continue to have the highest risk.
It is easy enough to see the reasons for this: children cost money, and can mean parents are able to do less paid work. But the lived reality is children going without things that we as a society believe are a minimum, the things that other children in the classroom take for granted. It means missing out on opportunities that support learning and development. And it can leave children carrying the burden of feeling different and left behind when they can’t take a present to a birthday party or have a friend round for tea.
It goes without saying that there is nothing that children can do to fix this situation, but these new findings show that for many families, there is nothing more that parents can do either. Four in ten lone parents working full time still fall below the minimum income standard. They can’t take on more hours to increase earnings, so cutting back is the only option.
The costs and availability of childcare is an important part of the puzzle in enabling families to make ends meet. High quality childcare boosts children’s learning and supports parents to go to work and raise family incomes. But too many families find that any financial gains from working are cancelled out by childcare costs. Unsurprisingly, many will chose not go back to work or will reduce their working hours, which can store up problems for the future by reducing lifetime earning potential and pension contributions.
It is often women that pay the price for staying at home and caring for children. Despite the introduction of shared parental leave, women normally take the majority of the time off after the arrival of a child, and weigh their earnings against childcare costs when they consider returning to work. The gender pay gap widens significantly after the arrival of a child and does not narrow ever again even once children are fully grown.
Lone parent families fare particularly badly: 75 per cent of children living with just one parent fall below the minimum income standard. 91 per cent of lone parents are women. The availability of affordable childcare can be particularly important for lone parent households. When you can’t share childcare with a partner, every hour that you are working requires at least one hour of childcare. The high cost of this care can mean that working your way out of poverty remains a pipe dream.
The Government have rightly recognised the need for and benefits of investing in childcare. From September, working parents of 3 and 4 year olds will benefit from an additional 15 hours of free childcare per week during term time. Others benefit from universal credit, tax credits, childcare vouchers or tax free childcare. But parents can find it difficult to navigate this range of different schemes and some parents with very young children can find that support is limited despite the high costs they are facing. We need a simple, efficient system that makes sure that every parent is better off working once childcare costs are paid.