Two parents working full-time for minimum wage and raising two children are on average £138 per week short of what they need for a basic living standard, according to research. The Child Poverty Action Group (CPAG) said its annual “cost of a child” calculations estimated that, for the first time since the research started in 2008, all family types on low and modest incomes are unable to meet their costs or reach what would be seen as a minimum acceptable living standard.
Its 2024 estimates suggest the two-parent working families raising two children can meet only 82% of their costs, compared to the same type of family earning enough to cover 93% of costs in 2008. Single parents in full-time work for the minimum wage are estimated to be around £192 short each week, meeting only 69% of the family’s costs, the organisation said.
CPAG said the calculations show the impact of rising costs and real-terms social security cuts. It added that the combination of the two-child limit which restricts child tax credit and universal credit to the first two children in most households – as well as gaps in help with childcare costs have led to “huge income shortfalls for working families with more than two children”.
The research estimated that a lone parent in 2024 on the minimum wage with three children can only cover 61% of the family’s costs, while a working couple with three children can meet only 70% of costs. The report, produced for CPAG by Loughborough University’s Centre for Research in Social Policy, estimated that raising a child from birth to 18 costs £260,000 for couples and £290,000 for lone parents.
Dr Juliet Stone, from Loughborough University, said her calculations showed “parents living on low incomes are increasingly unable to provide their families with a decent standard of living, even if they are in full-time work”. She added: “The findings add further evidence of the need for urgent policy reform – including removing the two-child limit – to ensure that all children can grow up in households with enough income to allow them to live with dignity.”
CPAG chief executive Alison Garnham said: “The PM can see that families are struggling against the tide but a reset will need action, not just words. “Investment in children through the social security system is guaranteed to improve living standards for kids and would be a vital down-payment on the future of the country.
“Families need to feel improvements, and a crucial place to start is with scrapping the two-child limit.”
A Government spokesperson said they are developing “an ambitious strategy which will explore all possible levers to reduce child poverty and give children the best start in life”.
They added that their immediate support in the meantime for families on the lowest incomes includes “providing £1 billion in cost-of-living support through the Household Support Fund, increasing the National Living Wage to £12.21 an hour, uprating benefits and saving 700,000 of the poorest households with children up to £420 on their Universal Credit deductions by introducing a Fair Repayment Rate”.