Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

National living wageChildcareLiving wageLatest News

Low-income families’ earnings do not cover basic needs

by Ashleigh Webber 20 Aug 2018
by Ashleigh Webber 20 Aug 2018

Families with two parents working full time at the national living wage are 11% (£49 per week) short of the income needed to afford an acceptable standard of living, it has been claimed.

The Child Poverty Action Group (CPAG) found that the wages of full-time low earners are still insufficient to meet their families’ needs, partly due to any “modest” wage increases being “clawed back” by the freezing of tax credits.

Living wage

What is the national living wage?

What is the living wage used by the Living Wage Foundation and how is it calculated?

Single parents face a particular struggle to cover their living costs. CPAG found even those on median earnings were 15% (£56 per week) short, while a single parent working full time earning the national living wage will face a 20% (£74 per week) shortfall.

The minimum income standard is calculated by calculated by specifying baskets of goods and services – including food, clothes and shelter – required to meet a minimum “socially acceptable” standard of living in the UK. It differs depending on the size of the household.

Families with three or more children might struggle to make ends meet following the introduction of the two-child limit on claiming child tax credit and universal credit, CPAG said. Affected families will receive nearly £2,800 less a year for each third and subsequent child born after 1 April 2017.

Alison Garnham, chief executive of CPAG, said: “Today, the majority of children growing up in poverty have working parents.

“While the number of parents in work is increasing, income from work alone is not sufficient to enable some to meet their families’ needs or escape poverty and the cost of a child is substantial.

“There is strong public support for government topping up the wages of low-paid parents and investing in children is the best long-term investment we can make.”

For parents who work full time, childcare costs (estimated at £80,000 over the course of the childhood) represented around half the average cost of bringing up a child – £150,753 for a couple and £183,335 for a lone parent.

CPAG’s The Cost of a Child in 2018 research, which was carried out with Loughborough University, noted that the government’s attempt to relieve financial strain by offering 30 hours of free early years childcare for many families did not work.

According to the Family and Childcare Trust, there are not enough 30-hour places to cover all working families in half of local authorities.

CPAG said low-income families facing high childcare costs often chose to limit their working hours to look after their children, resulting in “significant” reductions to family income.

Professor Donald Hirsch, the report’s author, said: “Some families who work full time, but on low pay, are relatively well-positioned to gain from a higher minimum wage and selective improvements in help with childcare. However, families with fewer working hours find it hard to access this help.

“This exceptionally harsh regime has been caused by the breaking of the relationship between family entitlements and family needs, under arbitrary cuts that leave some families close to destitution.”

Jatin Patel, social mobility manager at KPMG UK, said the report highlighted the importance of paying the “real” Living Wage, which is independently calculated by the Living Wage Foundation, to lift people out of poverty.

He said: “With the cost of living higher than it’s ever been, we as employers can take active steps to address this by paying the real Living Wage [£8.75 per hour and £10.20 in London].

“This also delivers tangible business benefits. In our own firm and supply chain it has improved staff morale, driven a rise in service standards, improved the retention of staff, and increased our productivity.

“It may not be possible or practical for everyone, but all organisations need to do what they can to address the problem of low pay.”

Ashleigh Webber
Ashleigh Webber

Ashleigh is editor at OHW+ and HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support. Prior to joining Personnel Today in 2018, she covered the road transport sector for Commercial Motor and Motor Transport magazines, touching on some of the employment and wellbeing issues experienced by those in road haulage.

previous post
BA crucifix worker accuses employer of harassment in new tribunal claim
next post
Offering yoga and meditation alone will not prevent stress

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

You may also like

PwC to award inflation-busting pay increase

27 Jun 2022

‘Real’ living wage announcement to be brought forward

30 May 2022

Living Wage employers pass 10,000 mark

11 May 2022

Law firm pays out £900 to help with...

20 Apr 2022

Sainsbury’s increases wages for second time in four...

8 Apr 2022

Investors tell Sainsbury’s to pay ‘real’ Living Wage

31 Mar 2022

Key workers thousands worse off this Christmas

23 Dec 2021

Rising inflation prompts calls for action on pay

15 Dec 2021

‘Real’ Living Wage increases to £9.90 an hour

15 Nov 2021

How can HR help staff get through the...

4 Nov 2021
  • Preventing Burnout: How can HR help key workers get the right help? PROMOTED | Workplace wellbeing may seem a distant memory...Read more
  • The ultimate guide to payroll for small businesses PROMOTED | You’ve started a business that has expanded to the point of requiring more staff to meet demand. Congratulations!...Read more
  • NSPCC revamps its learning strategy with child wellbeing at its heart PROMOTED | The NSPCC’s mission is to prevent abuse and neglect...Read more
  • Diversity versus inclusion: Why the difference matters PROMOTED | It’s possible for an environment to be diverse, but not inclusive...Read more
  • Five steps for organisations across the globe to become more skills-driven PROMOTED | The shift in the world of work has been felt across the globe...Read more
  • The future of workforce development PROMOTED | Northumbria University and partners share insight...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2022

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2022 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+