A cost of children crisis?

Families with children have been hit particularly hard by the rising cost of living. In this briefing we have used the latest data from the abrdn Financial Fairness Trust’s Financial Impact Tracker (May 2023) to dig into the impact on children and their families.

• One in five households with children – an estimated 1.5 million – are in serious financial difficulties (19% compared to 13% of families without children).
• Families with children were six times as likely to have had a pre-payment meter installed in the six months between November 2022 and May 2023 – affecting 475,000 households (6% compared to 1%).
• They are three times more likely to have fallen behind on bills (27% compared to 9%) and debt repayments (25%; 7%). And six times more likely to have had to turn to unlicensed or informal lenders (6%; 1%).
• They are twice as likely to be behind on rent or mortgage payments (10% compared to 4%) and to have gone without food or missed multiple meals (15%; 8%).

Families with children are around 50% more likely to report that their mental health (47% compared to 31%) and their sleep has suffered due to their financial worries (45%; 29%).

Single parents are particularly struggling to meet their basic needs. They're markedly more likely to be behind on household bills, to be going without food, to report problems with their housing and ability to pay their debts.

At a minimum, the Chancellor must protect low-income families by increasing social security levels in line with inflation at the Autumn Statement and to reform future Cost of Living Payments to take family size into account.

We also need to see family incomes boosted further through an increase to the child element of Universal Credit and a scrapping of the Benefit Cap, both of which would lift more than 300,000 children out of poverty.