The cost of a child in Scotland in 2022 - update

A report commissioned by the Child Poverty Action Group (CPAG) in Scotland from the Centre for Research in Social Policy at Loughborough University has found a widening gap between the cost of raising a child in Scotland and actual family incomes, despite the significant impact of Scottish government policies and lower childcare costs. Key points • In the UK overall, it costs at least £160,000 to bring up a child at an acceptable standard of living. • Recent inflation and real-terms cuts to UK benefits mean that out-of-work families with children now receive under half what they need as a minimum through universal credit and child benefit. • In Scotland, families benefit from a range of Scottish government policies to reduce these costs and to improve incomes, as well as from cheaper than average childcare. • The combined value of these factors can reduce the net cost to low-income families of bringing up a child by over a third. • In the past year, rising costs have made incomes less adequate relative to families’ needs throughout the UK. The shortfall has risen roughly from 30 per cent to 40 per cent below needs in Scotland, and from over 40 per cent to over 50 per cent elsewhere in the UK. Thus extra support in Scotland has mitigated hardship but leaves families who rely on benefits about as badly off as other UK families were before the cost of living crisis. • The shortfall is greater for the increasing number of families hit by the benefit cap across Scotland, with greatest impact in high rent areas. The number of capped families has risen in 2022 due to the benefit cap freeze, so it is relatively good news that the cap is being raised by inflation in 2023, preventing the problem from becoming much worse. The Scottish government’s commitment to ‘provide local authorities with additional discretionary housing payment funding to mitigate the UK government benefit cap as fully as possible’1 is particularly positive in this context. • Higher costs for families in remoter parts of Scotland offset the benefits of Scottish government payments, and these additional costs have become much more severe with the rising price of petrol and domestic energy.