By Suzanne Hall and Peter Grigg
The gloomy headlines about life in austerity have become all too familiar reading over recent years, but what have the pressures on household budgets really meant for family life, and could some of the long-term impacts have been hidden from view behind the front door?
Research conducted by Ipsos Mori on behalf of the Family and Childcare Trust opens a window on to the lives of 11 families, providing a vivid illustration of the delicate balancing act necessary to sustain household budgets and keep family life on track in austerity. The stories contained in Family Matters, in tandem with an Ipsos Mori survey of over 1,000 parents, demonstrate how mounting financial pressures are increasingly spilling over into family life and putting relationships to the test.
It is clear that this financial fragility is widely felt, with four in five (85%) of parents surveyed stating that the financial situation for families in Britain has got worse in the last year. What's more, families are paying an emotional price too: three in five (60%) parents have experienced increased levels of stress and anxiety as a result of changes in their financial circumstances and a third (33%) suggest that they have resulted in relational problems with family and friends.
We wanted to understand the key drivers of this fragility, and our research revealed that more often than not, it was rooted in the four Cs: cost of living, cars, credit and childcare.
It comes as no surprise that against a backdrop of stagnant wages, the rising cost of living is a constant pressure for families, with nine in ten (89%) mentioning that they have noticed an increase in the amount they are paying for both food and household bills. In order to adapt to these straitened conditions the families we worked with told us about a host of different cost-saving strategies that they had employed. These ranged from trading down in terms of what they bought and where they shopped to, at worst, parents going without in order that they could continue to provide food for their children.
"The price of everyday things; fruit, meat, fuel… has just skyrocketed," said a married father of one.
Such strategies, while saving money, carried attendant emotional and health costs. Parents spoke of the guilt they felt at not being able to afford the kind of food they wanted to feed their children – healthy, fresh fruit and vegetables in particular – and also mentioned how their own energy levels dipped as they cut back on what they ate.
Additionally, the cost of keeping the car on the road was one of the most destabilising sources of financial shocks for the families in the study. This reflects survey evidence that families are struggling to meet rising transport costs; 80% felt they had been affected by an increase in the cost of petrol in the last year - with three-quarters (76%) concerned about the rising cost of public transport.
Childcare was another significant cost incurred by families and one that acted as a barrier to work for many potential second earners – usually mothers. While families valued the educational and social benefits offered by formal childcare, the inflexibility and high cost of formal childcare meant, for many, it was incompatible with working life.
"Childcare is pretty extortionate," said a married mother of one.
"If I didn’t have Mark’s parents I wouldn’t work. We need the money but at the same time childcare is so expensive that you end up just paying to work."
Given these pressures, borrowing from family and friends or using high cost credit (payday and doorstep loan companies) was a common strategy in the 11 families studied. However, there was often a 'relationship premium' in borrowing from friends and family which created strain in close relationships and, of course a 'financial premium' for using high cost credit.
"Short term loans are bad, of course they are, everyone knows they are, but if I didn’t have them then I wouldn’t always be able to get through the month," said a single mother of two children.
The real-life experiences of the families in this study are a stark illustration of the need to tackle issues of family well-being and accessible childcare in a holistic way. In an era of scarce financial resources, only the most compelling arguments for spending will gain any political traction.
There is, however, a powerful economic argument for investing in families given the role they play in creating social and economic value. For instance, we rely heavily on families for the provision of informal care while the economic participation of adults in a household ultimately underpins consumer spending and taxes.
There is also a social imperative to consider. One of the most disconcerting trends flagged by our survey results is the extent to which families are worried about their prospects and those of their children – our survey showed that 80% of parents were 'very' or 'fairly' concerned about the prospects for their family's and children's future.
This research should, therefore, act as a warning signal. As savings buffers are eroded, resilience weakened and relationships tested, families need to be given the tools to regain control over their futures.
As resilient ecosystems, families can – and do – adapt, even in the most difficult of contexts. Nevertheless, to enable families to realise their potential, they need access to sufficient resources – financial, emotional and environmental – to thrive in a hostile economic climate.
Suzanne Hall is research director at Ipsos Mori and Peter Grigg is director of policy at the Family and Childcare Trust.
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