Families with children most likely to suffer cost-of-living hardship – study

The Chancellor has been called on to address a ‘cost-of-children crisis’ in the forthcoming autumn statement as research highlights family struggles.

Families with children are more likely than other households to suffer serious financial hardship and mental health problems as a result of the cost-of-living crisis, research has found.

The study also shows that while these families are regularly bearing the brunt of high inflation, it is single parent families that are most frequently struggling to cover basic needs including food, household bills and debt repayments.

The report by Action for Children, which provides support services for children and campaigns on their behalf, calls on the Chancellor Jeremy Hunt to include “at the very least” an increase to benefits in line with inflation in the autumn statement and commit to reforming of cost-of-living payments to take account of family size.

The organisation also said the child element of Universal Credit should be boosted and the benefit cap scrapped, adding this would lift more than 300,000 children out of poverty.

The Resolution Foundation think tank recently said freezing working-age benefits next year could save the Treasury more than £4 billion but at a “terrible cost” of plunging an additional 400,000 children into poverty.

The Action for Children research suggests 19% of households with children, equal to 1.5 million nationally, could be classified as experiencing the most serious form of financial insecurity.

This was six percentage points higher than those without children, according to University of Bristol’s analysis of survey results from 5,700 households.

Meanwhile, single parents faced the most severe challenges, with one in four in serious financial difficulty.

Families with children as a whole were found to be more likely to face the most serious hardship across a range of measures.

They were six times more likely to have had a pre-payment energy meter installed between November 2022 and May 2023 than households with no children, with potentially 475,000 families affected.

Families with children were three times more likely to have fallen behind on bills and debt repayments than households with no children. They were also found to have been six times more likely to have turned to unlicensed or informal lenders.

Based on the survey, families with children were twice as likely to have missed multiple meals and be behind on rent or mortgage payments, while 47% of these households reported struggles with their mental health compared with 31% of families without children.

In a case study provided by Action for Children, Charlene, 36, from Devon, described her situation as a single mother who receives Universal Credit because she cannot work due to health problems.

She said: “The money I get doesn’t go far enough. I’ve cut back on absolutely everything, but I’ve still had times when I’ve looked in the cupboards and they’re empty.

The Chancellor must act at the autumn statement to protect families with children from these intense and ongoing pressures on household finances

Paul Carberry, Action for Children chief executive

“It’s just degrading as a parent. When you’re hungry and worrying about feeding your child, you can’t focus on anything else.”

Action for Children chief executive Paul Carberry said the research shows the UK is in the midst of a “cost-of-children crisis”.

He added: “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.

Our welfare system provides a strong financial safety net for those who need extra support, and there are nearly two million fewer people in absolute poverty than in 2010

Government spokesperson

“At the very least, we must see benefits rise with inflation and cost-of-living payments reformed to take family size into account.”

A Government spokesperson said: “Our welfare system provides a strong financial safety net for those who need extra support, and there are nearly two million fewer people in absolute poverty than in 2010.

“But we know some families are struggling, which is why we have raised benefits by over 10% this year, are focused on halving inflation, have provided record financial support worth around £3,300 per household, and have announced another increase to the national living wage.

“To help people out of poverty through work, we are investing £3.5 billion to help thousands into jobs and are removing barriers for parents with the biggest ever expansion of free childcare – providing 30 free hours of childcare for working parents and support for children from nine months old to when they start school. This will save eligible parents up to an average of £6,500 per year.”