The cost of a child in 2023

The cost of raising a child to age 18 is £166,000 for a couple and £220,000 for a lone parent.

An out-of-work family with two children has less than half the income required to meet the cost of a minimum acceptable standard of living – this has fallen considerably since 2016 when over 60 per cent of costs were covered.

A lone parent on the minimum wage has a 24 per cent shortfall, while a couple both working full time on the minimum wage has an 8 per cent shortfall. A lone parent working full time on median wage still does not have enough to cover the costs, with a 13 per cent shortfall.

The rise of the childcare cap in universal credit (UC) has made a difference to childcare costs (a substantial expense in raising a child), however the cost of a full-time nursery place for a child under two is still higher than the cap in many areas of the UK.

The reason for the increased shortfall since 2016 is twofold – benefits have fallen, while costs have risen.

Larger families have, on average, lost more from the cuts to social security since 2016, as they are disproportionately affected by policies such as the two-child limit and the benefit cap.

Recent policy announcements (uprating benefits by 6.7 per cent, unfreezing local housing allowance (LHA), the rollout of some free childcare for 9 month – 2 year olds) will mean the shortfall should not increase any further next year (benefit capped households will fall further behind), but will not undo the cumulative impact of years of cuts.