2. Cost of living
The transition into parenthood can have a significant impact on household finances. This can lead to difficulties in managing new or existing financial commitments.
Having a baby also brings with it a range of additional costs around preparing for the new baby by purchasing equipment including cots, prams, sterilisers and baby clothes as well as adapting living arrangements. These additional costs can add to financial pressures already experienced through a loss of income and gaps in payments, particularly in the case of lone parents with a baby who find themselves with sole responsibility for household expenses.
2.1 Housing costs
Indicator: Housing affordability
Low-income families with a child under one in Scotland spent on average 26% of their net household income on housing in 2017-20. The same figure for all low-income families was 21%.
Source: Family Resources Survey
Low-income families with a child under one tend to spend a higher proportion of their income on housing (26%, compared to 21% for all low-income families). The evidence review did not yield any research explaining as to why this may be the case.
Since 2010 there has been a reduction in overall UK Government spending on housing across the UK. This includes reductions in housing benefits rates and eligibility, the introduction of the 'bedroom tax' and a reduction in the size and status of the social housing sector. In Scotland there have been efforts to mitigate some of these gaps. However, these cutbacks have a disproportionate effect on women who are twice as dependent on social security payments as men and are more likely to be in receipt of housing benefit. Currently, there is no evidence on the impact of the cuts on families with babies under one. Further detail in the progress of housing policies in Scotland can be found in the fourth year progress report.
Some of the mothers we interviewed said their Universal Credit payment relieved housing costs by covering their rent. Most of the interviewees were in social housing and it was suggested that private rented accommodation is unaffordable. Many mothers mentioned that having a baby prompted a change in housing; often moving out of pre-pregnancy housing to avoid overcrowding. While rental costs were not a prominent concern, mothers highlighted the challenges of securing homes which suit their family's needs. Problems with unsuitable housing included: being located far from family and support services, having to navigate several flights of stairs with a buggy, and needing to be relocated due to mould and damp.
2.2 Other costs of living
Indicator: Fuel affordability
In Scotland, low income households with a child under one year of age are estimated to have on average spent 14% of their net household income (after housing costs) on fuel across the period 2017 to 2019. Low income families as a whole spent a similar percentage of their net household income on fuel (16%). Due to relatively small sample sizes the difference is not statistically significant.
Source: Scottish House Condition Survey
Indicator: Food affordability
Households with a child under two years of age (across all incomes) in Scotland spent around 11% of their income on food and non-alcoholic drinks in 2017/18 to 2019/20. This is the same as the percentage spent by all households with children (11%).
While figures are not available for low income families with a baby under one due to small sample sizes we know that low-income families generally spend a higher proportion of their income on food. In 2017/18 to 2019/20 all low income households with children spent around 19% of their income on food and non-alcoholic drinks.
Source: Living Costs and Food Survey
Parents living on low incomes with young children in their household face a range of worries around living costs, many of which are shared with low income families more generally., These include concerns around food, fuel and internet costs. To try and manage these costs, and mitigate the harm to their children, some parents report prioritising spending around their children's needs. For example, parents may go without food so that their children can eat, and during the pandemic parents with young children reported prioritising internet bills so that their children were entertained. Prioritising energy bills can have an impact on other expenses such as rent or mortgage and council tax. Parents who are struggling financially have discussed in previous research how they have to make sacrifices such as restricting spending on food and other household essentials in order to cover their energy bills.
Further, parents with a baby often rely on informal support networks for assistance with everyday costs. Data from the Growing Up in Scotland study shows that around 90% of parents of babies said that the child's grandparents bought things for the child with around a quarter of grandparents doing so on at least a weekly basis. However, there are families who do not have this source of financial support.
The rising costs of household energy bills is causing additional pressure and concern for families. This concern is particularly prominent for families with a baby or toddler as these families are more likely to spend time at home and have to heat their homes to ensure their children are warm enough for bath times and nappy and clothing changes. There are examples where parents report not heating their homes due to their fear of high energy bills. While other evidence reports how parents need to plan and make decisions about their heating patterns to fit the needs of their young children, even when they are not able to afford it. However, this is not always and nor should be a choice needed to be made.
The mothers we interviewed highlighted some of the additional costs of having a baby. Initial costs for cots, sheets, bottles etc. were mentioned. Some mums also emphasised that costs increase as the baby grows, such as food costs associated with weaning, and clothing costs due to babies growing quickly.
The recent cost of living crisis – in particular, increased prices of gas and electricity - was a prominent theme in the interviews. As a result, some mothers said they had little money left over after covering essential costs and some were struggling with debt. A clear theme in the interviews was mothers prioritising spending, cutting back, and carefully budgeting to cope with increased outgoings.
"The kids are fed and have gas and electric but we're getting into debt because I'm prioritising food and energy."
Mother over 26, lone parent
"[Social security income is] not really enough to live on because the cost of everything is going up, even in the shops. It's just a bit of a struggle at the minute. I'm still coping, it's just that I'm having to cut down on loads of things. I can only take him [son] to the park, not to places that we need to pay anymore. And I'm doing my driving lessons at the minute and my test is coming up, but the price of them have gone up. I can't go out with friends with [son] as much."
Mother under 20, lone parent
"It's a conscious decision to not get a dishwasher or a tumble dryer because the bills will add up.
We just cut back on things, for ourselves really. The money we would have spent on ourselves, we just don't do. We just have to do that. We just don't go out […]"
Mother aged 20-25, with partner
Indicator: Unmanageable debt
12% of all households with a child under one year old were in unmanageable debt in the UK, as of 2018-20. This proportion was slightly higher than for all households with children in the UK where 8% were in unmanageable debt.
Source: Wealth and Assets Survey. Due to small sample sizes, data for household with a child under 1 is not available for Scotland.
Many low income families with a child under one have experience of debt, which is often caused by difficulties in affording basic costs of living such as energy bills, council tax and covering unexpected expenses. Often debt occurs because parents need to prioritise their children's basic needs over household bills. Certain transition points can also make families with a baby especially financially vulnerable and increase their chances of falling into debt further. This includes the point where a mother's maternity allowance is stopped and they transition to Universal Credit.
To meet the costs of having a new baby low income families are at a higher risk of having to make use of short term borrowing or making purchases on credit. Research by Save the Children with parents of babies and young children during the COVID-19 pandemic also found that in times of crisis the financial support received was not enough to keep families afloat. Low-income families reported struggling to pay off debt and being in a cycle where they accumulated further debts, with essential costs knocking them back and the financial support they received only covering the most essential household bills.
Debt was a significant concern for several of the mothers we interviewed. Of those who spoke about debt, all had engaged, or sought to engage, with support services. Those who had engaged with support services found the support lacking or unhelpful. Additionally, welfare advice service fees were flagged as a barrier to debt recovery.
"I had a welfare advice check but had to pay them money every month for support with monthly service charge. I ended up saving more money trying to pay it back myself than giving them money to support me with it. I've been to citizens advice too but they couldn't do much because it's our fault isn't it. But it was my mental health and my anxiety and I couldn't work so it just kept building up over time more and more. We want to pay it off over time but it's not as easy as just paying it all at once because we've got other things to manage. My boyfriend has his car, other payments and gas and fuel is going up. He has to pay for the car monthly because the old one couldn't fit baby's pram and wasn't suitable for a baby so he got a new one but now we're paying that back every month."
Mother aged 20-25, with partner
2.4 Enablers (access to affordable credit, internet access, assets and savings)
Some of the mothers we interviewed told us that, after covering costs of living, they were not able to build savings.
Savings and access to affordable credit can protect against material deprivation and problem debt. They act as a buffer against unexpected costs and fluctuations in income. There is no detailed information on access to affordable credit or assets for this particular household type. However, there is ample evidence of how useful financial support services can be for this group.
This evidence is supported by our interview data. Most of the mothers we interviewed were confident that they knew of financial supports available to them. This knowledge came from their own research and engagement with support services and community groups. Nevertheless, participants added that greater availability of financial advice was further required to fully support their understanding.
"My awareness of financial support is quite good but sometimes I like a bit more information because I sometimes don't understand things, can be quite complicated, I like to have someone to help me fill stuff out."
Mother under 20, lone parent
"Probably more information on financial support would be useful, I don't really understand it that well. I usually look online."
Mother under 20, lone parent
Evidence shows that coordinated systems where parents are signposted and referred for financial support can be particularly beneficial. This includes income maximisation services, like financial counsellors and welfare advice services, which parents can access through their routine baby appointments. When embedded in routine ways these services provide an opportunity for wide-scale early screening, identification and referrals. A report produced by the Joseph Rowntree Foundation highlights that access to services supporting families need to include both financial support services but also provide practical and emotional support and advice. The report argues that holistic support across all three pillars, can provide social capital and reduce the impact of poor mental health.
There are some examples in Scotland worth highlighting:
- In Scotland all health visitors, midwives and family nurse practitioners must screen and offer a referral for financial advice to all pregnant women and parents/carers of families with children under five years of age through the Financial Inclusion Pathway. Money and welfare services available can include: income maximisation, money and debt advice; financial capability and management support; and awareness raising and service provision around banking, insurance and affordable credit. An evaluation of this service found that most parents believed the health professionals they had worked with played a role in helping them with financial challenges. In particular, Health Visitors were considered to be trustworthy, highly knowledgeable about families' particular circumstances, and involved in new parents' lives in a way no other professionals were likely to be. Where challenges were raised, these tended to be in circumstances where parents had barriers around discussing financial issues with health professionals due to a fear of judgement or questions being raised about their parenting abilities and the subsequent impacts they thought this could have with potential social services involvement. The importance of building rapport and creating strong relationships with parents was identified as a way of mitigating these barriers.
- The Healthier, Wealthier Children project in Glasgow specifically targets pregnant women and families at risk of, or experiencing poverty. It involves health, local authority and voluntary sector partners and has established referral links between health and money advice services. An evaluation of the project found one of the main benefits has been easier access to advice and help for 'hard-to-reach' groups not previously known to advice services. The evaluation also found that it has led to new ways of offering money/welfare advice specifically for parents of young children. This was in the form of outreach sessions in baby clinics and at weaning fayres - with project health staff now holding an increased awareness of the role of advice services. However challenges with capacity were noted, with these expected to get worse as a result of welfare reforms and increasing cuts to budgets.
- Generally, maternity healthcare is an important source of financial advice for mothers in poverty. However, it is concerning that refugee and asylum seeking women, an already highly vulnerable group, appear to face barriers to accessing maternity services. Key barriers include language, discrimination and a lack of 'cultural health capital' – i.e. not having a good understanding of the healthcare system.
Further, internet connection can facilitate access to financial and other support services. Therefore, monitoring internet access amongst this group provides insights into any barriers these families may face.
Indicator: Internet access
80% of low income Scottish households with a child under one had internet access at home in 2012-2019. This compares to 85% of all low income households with children in the same time period.
Source: Scottish Household Survey
Overall, a lower proportion of low income households with a baby under one have internet access, compared to all low income households with children (80% and 85%, respectively). During the pandemic, where face to face support was highly restricted and social isolation exacerbated, the negative impact of not having internet access was emphasised.
In interviews, it was clear that mothers rely on internet connection for accessing a variety of essential services, including education, claiming benefits, applying to concessionary schemes, and accessing advice and support. This reliance was particularly significant during the pandemic when some maternal health appointments also took place online.
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