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Work doesn’t pay for low-income families

Joanna Faith
Written By:
Joanna Faith

Low-paid families working full-time are still unable to earn enough to meet their families’ needs, research shows.

Lone parents on the national living wage are £74 a week short of what they need to achieve a minimum standard of living, according to the Child Poverty Action Group.

And two parent families are £49 a week short.

The national living wage is currently £7.83 per hour.

The report said rising prices, benefits and tax credit freezes, the introduction of the benefit cap and two-child limit, the bedroom tax, cuts to housing benefits and the rolling out of Universal Credit have hit family budgets hard.

It found the overall cost of a child over 18 years including rent and childcare is £150,753 for a couple and £183,335 for a single parent.

Childcare costs are a major strain on working low and middle-income families, the report said.

Full-time childcare costs around £80,000 over the course of childhood, making up around half of the total costs of bringing up a child.

The new 30 free hours early years entitlement has helped but parents can face difficulties finding nurseries and childminders offering this scheme, the report found.

Author of the report, Professor Donald Hirsch, said: “Throughout the past decade, families in and out of work who rely on some public financial help to make ends meet have found things ever tougher, as neither tax credits nor benefits have risen in line with growing living costs. But the pain is not being evenly spread.

“Some families who work full time, but on low pay, are relatively well-positioned to gain from a higher minimum wage and selective improvements in help with childcare.

“However, families with fewer working hours find it hard to access this help. Out of work families, together with working families with more than two children, are being hit hardest by ongoing cuts. Current policies will force an increasing number of families to live on less than half of what they need.

“This exceptionally harsh regime has been caused by the breaking of the relationship between family entitlements and family needs, under arbitrary cuts that leave some families close to destitution.”