Families working full time at the national minimum wage are facing a shortfall when it comes to the minimum cost of raising a child, new research has revealed.
The findings come as part of the new ‘The Cost of a Child in 2014’ report by Child Poverty Action Group (CPAG) and funded by the Joseph Rowntree Foundation (JRF).
It revealed that the minimum cost of a child (including childcare, rent and council tax costs) has risen by 7.7% for a couple since 2012 to £164.19 per week. For lone parents, this is a more significant rise of 11.4% since 2012 to £184.50 per week.
The research also went on to highlight that the gulf between wages and the minimum cost of a child stands at 18% for full-time working families and even higher 43% for out-of-work families.
This shortfall comes as further figures from the report reveal that the wages have failed to outpace other increases in the period between 2008 and 2014.
While inflation climbed by 19% and the minimum cost of living increased by 27-28%, wages grew by just 9% in contrast.
Striking a chord with ‘hard-pressed’ parents
Commenting on the stark figures, Alison Garnham, Chief Executive of Child Poverty Action Group, said: “This new research reveals that meeting the ‘no frills’ needs of families is becoming tougher as the cost of a child rises while wages flat-line and support from Government is cut. It’s a picture many hard-pressed parents will recognise.
“Children cost. That is why families with children have a higher risk of poverty than those without. The most recent statistics show 27% of children live in poverty in the UK, and with declining levels of support for families, child poverty can only increase.”
A payment method to help manage children’s budgets
Prepaid Youth Cards may be an option for parents who are keen to have full control over their children’s spending, while still helping their children to develop money management skills, a hugely important skill as they enter adult life.
Prepaid Youth Cards can be used by children, usually from the age of 10, to make a variety of payments and parents are able to see where their money is being spent.
Parents can also include various settings on the card to help children better manage their money, such as a maximum monthly spend. Instilling this type of financial discipline from a young age will be a key asset for children considering the kind of financial responsibility they will face later in life.
