Today Gingerbread released the report Paying the Price, which explores the effect of austerity on single parent families. Sumi Rabindrakumar, Research Officer at Gingerbread blogs about the research findings.

Families have been struggling under the cloud of ‘austerity’ since the 2007 recession. In recent months, there has been renewed debate across political lines over the consequences of austerity reforms and a stagnating economy for living standards. But while many households in the ‘squeezed middle’ are feeling the pinch, new research from Gingerbread shows that single parents’ finances have been hit particularly hard in recent years.

Bearing the austerity burden

Single parents are bearing a disproportionate burden of welfare reforms. The government’s own impact assessments for the wave of changes starting in April 2013 show that they are expected to make up from 20 to 50 per cent of those affected – yet single parents only make up seven per cent of all households.

Our Paying the Price report shows the harsh reality of these changes. Around 40 per cent of single parents we surveyed are paying extra council tax since the localisation of council tax support. Around one in eight single parents surveyed said they had already been hit by the benefit cap. And over a fifth of single parents said they had lost at least £100 per month due to the April 2013 reforms.

For those already living “down to the pounds and pence”, as one single parent put it, these are not insignificant sums. Single parents’ finances are already stretched to the limit – nearly eight out of ten single parents surveyed find managing household finances a constant struggle at best. Rising living costs affect single parents more than couples, as single parents on average spend a greater proportion of their budget on essential bills.

And despite recent ‘green shoots’ of economic growth, the logical response to tighter budgets – earning more – is not an option for many single parents. Out-of-work single parents are keen to find jobs, yet interviews revealed a lack of employment support and understanding among both employers and Jobcentre Plus advisers of single parents’ need for flexible work. And those in work often do not fare much better – nearly a fifth of single parents surveyed said they had lost employment income in the last year due to falling wages or hours, or redundancy.

Managing the downturn

Our research shows how single parents are working hard to manage within tighter finances. Micro-managing household budgets, cutting back on spending (particularly on themselves), scouring shops for the best prices, selling items online – these are just some of the strategies single parents are using to make ends meet.

“I only buy things that I really need. If it means sacrificing something else to buy something that I really need, I’ll do that. We’ll go without until I really, really need it”

But this is not enough to weather the financial storm for many single parents. In our survey, 40 per cent of single parents were in arrears on regular payments; and many had slipped quite far behind. Nearly 90 per cent of single parents surveyed have had to borrow money or seek welfare assistance when they ran out of money in the past 12 months. Around half of those surveyed had to rely on credit cards or overdrafts when they ran out of money; and one in eight had turned to payday or doorstep lenders. Worryingly, the single parents involved in our research suggest that this reliance on borrowed money is on the rise.

“I’m trying not to [take out loans]…when an unexpected bill come in, it’s so easy to say ‘Yes, I’ll have one, and then that’s going to be the last’ – until the next one. It’s just a circle”

A call for caution

It is, of course, welcome news that there are emerging signs of economic recovery in the UK. But this research serves as a timely reminder that not everyone is getting an equal share in these gains.

What is more, the financial situation for many single parents is only likely to get worse. The current welfare reform programme will be less than 60 per cent complete by the end of 2013/14. We do not yet know how universal credit will affect single parents, but recent analysis by the Institute of Social and Economic Research at the University of Essex suggests they will lose out in cash terms, whether in or out of work. And the Chancellor has recently warned of further fiscal consolidation until 2020. It is clear that for those single parents already struggling, there is much more financial pain to come.

Gingerbread will continue to track how single parent families fare under austerity as part of our Paying the Price project. We would, however, urge policy-makers to think hard before embarking on further reforms, particularly to the tax and benefit system. The government’s stated aims for their welfare reforms are fairness and affordability. Pushing single parents to the brink financially, increasing the risk of debt and demand for emergency financial support in the process, risks failing on both counts.

“What is already a struggle becomes a budgeting mission which never ends. There is no respite from watching every penny”

Paying the Price is a research project being carried out by Gingerbread, with funding from Trust for London and Barrow Cadbury Trust. Read the first report tracking single parents under austerity at www.gingerbread.org.uk/payingtheprice.