Why do families in the UK face such enormous costs to bring up their children ?
CPAG research has calculated that it costs £164 a week to cover the costs of the basics for children; child benefit (£20.70 for a first child, £13.70 for subsequent children)
During pregnancy and childbirth, mothers and families receive a lot of support, but this ends abruptly after a baby’s birth. Yet the emotional, financial and social pressures continue and can be immense (interview with Dan Poulter CON MP in the Guardian)
The cost of raising a child as estimated at a whopping £231,843 according to the Daily Telegraph
Surging childcare fees and expenses linked to education mean the basic cost of bringing up a child in the UK has risen 50 per cent faster than inflation over more than a decade.
The study, carried out by the Centre of Economic and Business Research (CEBR) for the insurer Liverpool Victoria (also known as LV=) suggests that parents have cut back spending on toys and even food but any savings have been swallowed up by other rising costs.
It also points to evidence that the expense of raising children could be shaping the population, with some parents actively postponing of ruling out having a second child because of the cost.
More than half of traditional single-earner households with children no longer have enough money coming in each month to maintain a decent – but far from luxurious – lifestyle, the study by the respected Joseph Rowntree Foundation think-tank shows.
The proportion of such families struggling to get by has jumped by 36 per cent since 2009, and as much as a quarter since 2012.
It threatens to reignite the row over the Coalition’s changes to child benefit and new childcare tax breaks which led to accusations the Government was forcing middle-class stay-at-home mothers back into employment.
The study details how households with children are falling behind the rest of society in maintaining a basic “socially acceptable” standard of living, amid changes to Government support for families.
The Taxation of Families – International Comparisons 2013“…the OECD average wage for the UK (£35,548), one-earner married couples with two children paid 35% more than the OECD average. Single parents with two children paid 24% more. This contrasts with the situation of low income families who broadly compare favourably with their OECD counterparts as tax credits and child benefit often exceed income tax and National Insurance Contributions.
The report also highlights the way in which many one-earner and single-parent families are trapped in poverty as a result of very high effective marginal tax rates which ultimately fail to make work pay and crucially stifle aspiration. Many UK families have an effective marginal tax rate of 73%, meaning that only 27p of every additional pound earned is retained. Marginal rates on low to middle income families are higher than in all comparable OECD countries.”
Campaigners say the OECD figures are more evidence that Britain has an “unfair” tax system, giving traditional families a greater tax burden than the global average….
British families with two children and one earner face a tax burden of 27 per cent, the OECD said the average rate for such families across the group is 26.4 per cent.
By contrast, British families where both parents work face an overall tax rate well below the international average: their tax burden is 23.5 per cent, compared to 28.3 per cent across the OECD.
The figures also showed that a British single earner on the average wage pays a tax rate of 31.5 per cent, well below the OECD average of 35.9 per cent.
Who pays the most tax ? the rich or the poor ?