The UK is, by all conventional measures, a rich country. As a member of the G7 – a group of the most advanced economies – it typically ranks among the top ten largest economies measured by GDP. And yet, by another measure that reveals far more about our society and economy, it is failing. Child poverty in the UK is increasing, reaching 30.5% in 2023/24. Around 4.45 million children are growing up in poverty. That’s more than all of the children in London, Wales and the East of England combined.
How can this country tolerate such staggering levels of child poverty? And is the current Government willing to take the necessary actions to stop this?
Growing up in poverty has immediate and long-term consequences. It affects children’s health, educational outcomes and future employment. Supporting children’s development and shielding them from poverty should be a no-brainer in a country with the resources to do it. The UK surely does – and it has done it before. The Labour Government under Tony Blair between 1997-2007 lifted over 500,000 children out of poverty and showed that with the political will and targeted interventions, policy decision can effectively reduce poverty and have a material impact on children’s everyday life and prospects. The Sure Start program was one of the most notable initiatives, which provided families with children under the age of five with crucial support. Recent evidence shows that the long-term benefits of Sure Start centres largely exceed the costs.
Other policy measures focused on improving the living standards of those on low incomes – disproportionately women – likely contributed to the reduction of child poverty between 1997 and 2004. Child poverty is inextricably linked to women’s poverty. Children are poor because their mothers are poor. They are the ones typically managing the household budget and cutting essentials for themselves to feed and clothe their children. A gendered approach is therefore key to a comprehensive plan to reduce child poverty.
The current Government has stated their intentions to tackle child poverty, but the next few months will determine if they back it with policy and investment. In August 2024, the Government established the Child Poverty Taskforce, which is currently developing the new Child Poverty Strategy. The strategy was initially expected in spring 2025 but has now been pushed back to the autumn. While this will mean that more children will be pushed into poverty in the meantime, it does make it more likely that the Government will put more money behind it.
The biggest question remains what the Government will do about the two-child benefit limit. Implemented in 2017, the two-child limit on benefits restricts access to means-tested benefits, such as the Universal Credit Child Element, to only two children per household. It is one of the main drivers of child poverty and has the greatest impact on large families, with child poverty rising to 43.61% for families with three or more children. If the policy stays in place, the number of children living in poverty is expected to reach a jaw-dropping 4.8 million by 2029/30.
Any serious plan to tackle child poverty must include scrapping the two-child limit. If abolished, it would immediately lift 350,000 children out of poverty. Many organisations have pointed out abolishing the two-child limit as the most cost-effective way to reduce child poverty. But there’s more to be done. Support for parents, especially mothers, is also crucial to reduce child poverty. Many mothers are locked out of the labour market by sky-high childcare costs, the lack of flexible work or inadequate transport links. These barriers are especially acute for single mothers, who have to juggle childcare and paid work alone, with limited support and fewer resources. Better public transport and training opportunities would go a long way in protecting women and their children from poverty.
Finally, the social security system also needs to be reformed so that it functions as a proper safety net. Besides scrapping the two-child limit, the Government should abolish the benefit cap, another punitive measure that contributes to child poverty and particularly affects single parents. Universal Credit and Child Benefit payments need to increase to at least their pre-austerity levels in real terms.
As we await the Child Poverty Strategy, expectations are rightly high. We hope the Government gives this matter the attention it deserves and commits the necessary resources to scrap the two-child limit. This is a test of political will for Labour. Measures that only tweak the two-child limit will not be as effective as removing it altogether in reducing child poverty. We have seen child poverty increasing for too many years, and it is time to reverse course. The Labour Government must take bold action to make it happen. It has done it before, and it can do it again.
Ignacia Pinto is Senior Research and Policy Officer at the Women’s Budget Group. She joined the Women’s Budget Group in July 2022. Since then, she’s been working on the cost of living crisis, taxation, feminist macroeconomics, and childcare. She also leads on WBG’s analysis of fiscal events. She holds a Master of Public Administration from the London School of Economics and a Master’s in Economics from Universidad Católica de Chile.