One in five parents in ‘dire financial straits’ as charity warns UK is in ‘cost-of-children crisis’

According to new research by Action for Children, families with children are among the hardest hit by the cost of living crisis, with one in five (19 per cent) classed as being in ‘serious financial difficulty’, the most severe form of financial insecurity. This is six percentage points higher than those without children (13 per cent).

It comes as the Trussell Trust has said that its network of food banks are ‘bracing for the worst winter yet’, expecting to distribute more than 1 million food parcels between December 2023 and February 2024 – the most parcels ever. It says this equates to an average one food parcel every eight seconds (11,500 a day) and 7,000 people seeking support each day.

Food banks are calling on people in their local communities to donate, if they can, to ensure that they can continue to support everyone who needs their help.

The research by Action for Childcare is based upon data from the abrdn Financial Fairness Trust survey of more than 5,000 UK households, carried out in May.

It also reveals, compared to households without children, families with children are:

• Six times more likely to have had a pay-as-you-go energy meter installed (affecting 475,000 families) and to have turned to informal lenders or loan sharks in the preceding six months.
• Three times more likely to be behind on household bills (affecting 2.1m families) or debt repayments.
• Twice as likely to be behind on rent or mortgage payments, to have gone without food when hungry or missed multiple meals in the preceding month.

Single parents fared the worst, with a quarter (26 per cent) being in ‘serious financial difficulties’- higher than any other family type.

Action for Children is calling 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 wants to see family incomes boosted further through an increase to the child element of Universal Credit and the benefits cap scrapped, lifting more than 30,000 children out of poverty.

‘The Chancellor must act at the Autumn Statement to protect families with children from these intense and ongoing pressures on household finances.’

Paul Carberry, chief executive of 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.

‘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 per cent. The Bank of England does not expect to reach its 2 per cent 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.’

 

 

 

 

CASE STUDY

 

Full-time mum, Jo, age 24 from North Devon, has a two-year-old son, who has developmental delays and behavioual issues. Her partner works full-time, but they also depend on Universal Credit. Before the pandemic and having her son, Jo also worked full-time. She says it’s now impossible to keep up with her family’s bills and buy everything that they need.

  

‘I have to pick and choose which bills to pay each month and sometimes I can’t afford to buy food or nappies for my son. I’ve skipped meals before to make sure I can feed my child and that he has what he needs.

 

‘Pretty much all my money is gone the day it comes into my account. I’m often left with about £40 for the rest of the month, including for food shopping. It’s just not enough. I’ve cut back on absolutely everything, including essentials. I’m already in debt and end up taking on more to cover bills.  

 

‘I worry my son is going to miss out on things in his life because I can’t afford them, and that’s really hard. It has a negative impact on my mental health, it’s overwhelming and upsetting when you see the cupboards are empty. Not being able to afford the basics makes me feel useless.  

 

‘Before Covid I worked full time and had more money to spend, I didn’t even think about going to the shop to get something if I needed it. Since having my son, and giving up work to care for him, things are so different. I would love to go back to work, but it’s not possible right now with the high cost of childcare and my son’s additional needs.

 

‘I’m dreading winter as I’ve really struggled to top up my pay-as-you energy meter – I’ve had to go to Action for Children and ask for help because some months I just couldn’t afford anything. Luckily they helped me with gas and electric a few times, and bought nappies for my son. I don’t know where I would be if I didn’t have their help.’