Cost of living: Families face struggle to maintain living standards

A charity called on the government to increase benefits in line with inflation

Research says families are struggling to maintain living standards - even with two parents working full-time.

Loughborough University's Cost of a Child report found 2021/2022 saw the biggest fall in living standards since 2012.

The Child Poverty Action Group commissioned the report and wants benefits increased in line with inflation.

The government said vulnerable people's needs were at the heart of their work.

'Stark situation'

The research found below-inflation rises in benefits had left families 6% (£34 per week) short of a minimum, no-frills standard of living.

It also said the cost of raising a child to 18 had reached almost £160,000 for couples and £209,000 for lone parents.

The researchers worked out the costs using the Minimum Income Standard (MIS) for the UK, which is based on what members of the public think are the essential items every family should be able to afford.

The cost was calculated as the difference the presence of a child made to the whole family's budget.

The report's authors said childcare was a key driver of the costs a family faced

They added the cost of a child for a lone parent was worked out as higher than that for couples, because certain fixed costs of having children were offset by greater adult savings for couples.

The report's authors said childcare was a key driver of costs for in-work families, making up about 60% of the lifetime cost of a child for a couple working full-time, compared to about 40% in 2012.

Loughborough University's Dr Juliet Stone, who co-authored the report, said: "Our analysis has revealed the stark situation facing households with children in the face of the cost-of-living crisis.

"In the past year, families have experienced the sharpest deterioration in living standards that we have seen since we first started calculating the cost of a child a decade ago.

"Even for couple parents who are both in work on the National Living Wage, rising costs coupled with real-terms cuts to state support, including for childcare, mean that their income does not allow them to reach a socially-acceptable standard of living."

Dr Juliet Stone co-authored the report

The annual report - the 11th to be produced - looks at how much it costs families to provide a minimum socially-acceptable standard of living for their children.

Child Poverty Action Group chief executive Alison Garnham said: "The warning lights are flashing as family incomes plummet following the real-terms benefit cut last April.

"Another cut would be calamitous. The government must end the desperate worry and uncertainty in struggling households by uprating benefits with inflation and removing the benefit cap."

A spokesperson for the Department for Work and Pensions (DWP) said: "The UK welfare system offers a vital safety net to millions of people, enabling them to support themselves and their families while building towards financial independence through work.

"This government is determined to put the needs of the most vulnerable at the heart of everything we do.

"As is the usual process, the Secretary of State is currently conducting his statutory annual review of benefits using the most recent prices and earnings indices available."