By Mark Fairlie.
Research by The Child Poverty Action Group (CPAG) has found that low-earning parents can’t provide for their family, despite working full-time on a “no-frills” lifestyle. According to the findings, a single parent receiving the National Living wage is short of £74 every week, while a couple with two children are short of £49 every week.
Picture getting better but only slightly
Although the research suggests that families are struggling to pay for the necessities, the figures have improved from last year. In 2017, a couple with two children would be short by £59 each week.
In the UK, the National Living wage is currently £7.83 an hour for employees that are aged 25 and over. The government has said that fewer families live in complete poverty now because of the introduction of the National Living Wage.
The spokesman said: “The employment rate is at a near-record high and the National Living Wage has delivered the highest pay increase for the lowest paid in 20 years, worth £2,000 extra per year for a full-time worker.”
Higher Living Wage level, harder-to-claim benefits
However, the CPAG have said that families are not necessarily better off with the small increase in the Living Wage because the government have made tax credits more difficult to receive.
Around about the same time that tax credits were frozen, inflation created higher prices and changes to different benefit schemes created a large hit to the average family budget.
The definition of a “no-frills” lifestyle is based on the Minimum Income Standard which is a set of criteria created by the Centre for Research in Social Policy at Loughborough University.
The set of criteria calculates what income is needed for the minimum standard of living. It does this by considering the cost of essentials, such as food, clothes, accommodation and “other costs required to take part in society”.
The research centre has gathered a focus group from different socio-economic backgrounds and then asked them what a household should afford to achieve a decent living standard.
Falling cost of raising a child
The CPAG’s Cost of a Child report revealed that the total cost for a couple raising their first child until the age of 18 had dropped from £155,100 to £150,800.
The report also noted that the high cost of raising a child was largely influenced by childcare, which accounted for almost half of the total figure.
In July 2015, the National Living Wage was introduced in the budget of Chancellor George Osborne and was rolled out in April 2016.
Currently, the living wage is £7.83 an hour for those that are 25 and over, however, the UK government aim to increase this figure to £9 an hour by the year 2020.
The chief executive of CPAG, Alison Garnham said that there is “strong public support” for the UK government to increase the wages of parents that receive the National Living Wage.
Garnham also urged the government to “unfreeze benefits and restore work allowances” in their November budget because “income from work alone is not sufficient to enable some to meet their families’ needs to escape poverty and the cost of a child is substantial”.