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4 July 2022

How the value of child benefit has plummeted

The welfare payment is now worth less than it was in 1999.

By Katharine Swindells

Child benefit has been falling in real terms since 2010, and is now worth less than it was in 1999 even as the cost of living continues to surge. 

The government today announced a consultation into reducing staff-to-child ratios in nurseries, as a way of lowering the cost of childcare. This move has been widely criticised by industry experts as only reducing the quality and safety of care, not the cost.

Childcare is an enormous expense for young families, rivalling rent and mortgages: net childcare costs absorb 29 per cent of the average couple’s wages. Since 2011, the average price of 25 hours of nursery for an under two-year-old in Britain has risen by 44.5 per cent. Over the same period, child benefit rates have increased by just 7.4 per cent.

In April 2022, the current weekly rates of child benefit were increased to £21.80 for the first/eldest child, and £14.45 for each subsequent child. When the Conservatives took office in 2010, these rates were £20.30 and £13.40 respectively. Once adjusted for inflation, the cash-terms increase of £1.50 equates to a fall of 20 per cent.

In 1999, families received £14.40 a week for their eldest child, which is almost £24 in today’s money.

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[See also: The cost of flying in the UK has fallen while train prices have risen]

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