Families face endless poverty as cost of living outstrips earnings

Date: 24th January 2017
Category: Child poverty

Rises in the cost of living will outstrip meagre increases in child benefit by 17 times by 2020, a new report by the End Child Poverty coalition has warned.

The End Child Poverty coalition's Feeling the Pinch report shows reductions in the value of benefits, relative to costs of living, are likely to leave a family with two children living in poverty and leave them worse off by as much as £2,800 per year by 2020, compared to the start of the decade.

In addition, a family in a typical privately rented two-bedroom property could also have a rent shortfall of around £154 a month by 2020, after a four-year freeze on housing benefit.

This comes as families in poverty are having to pay a premium for the essentials, despite being least able to afford them. Household items like a cooker, energy and home insurance are likely to cost a family living in poverty nearly £1,700 more than a higher income family would have to pay.

The coalition is warning that the disconnect between increases in financial support and those in the costs of living, together with the poverty premium, is leaving many families struggling to buy food for their children, or heat their home through the winter.

The campaign is calling on the government to unfreeze children's benefits, and to take action to end the poverty premium.

One parent told the coalition: "Most months I have to decide what is more important: clothes for me or my child, or heating."

End Child Poverty is calling on the UK government to take action by ending the current four-year freeze on children's benefits, and by increasing help with housing costs in line with local rents.

The coalition is also calling on the government to establish a commission to explore how businesses can ensure that their customers on a low income do not end up paying the highest prices for goods and services.

Hanna McCulloch, speaking on behalf of CPAG in Scotland which is a member of the End Child Poverty coalition in Scotland, said: "Children and families in Scotland and across the UK are facing unparalleled financial challenges, with the cost of living set to sky-rocket while the real value of benefits falls.

"The UK government must act now to end the benefit freeze and make sure benefits for families - both in and out of work - reflect the realities of raising a child in the 21st century.

"The Scottish Government can also do more to help reduce the costs families face and at the same time use all its new social security powers to make sure financial support for families keeps up with the cost of living."

Sam Royston, chair of the End Child Poverty coalition, said that families living in poverty are trapped between frozen support, rising costs of living, and a hefty poverty premium which means that they pay the most for basic essentials.

She added: "End Child Poverty members know all too well the impact this poverty trap has on children's lives. Too often, families are facing impossible choices between feeding their children and heating their home.

"The government needs to take action now, to lift the four-year freeze on children's benefits, and to ensure that the highest prices for family essentials aren't paid by those who can least afford them."

• Read the full press release by the End Child Poverty Coalition here.