“Poverty scars the lives and life chances of our children. It is shameful that child poverty has increased by 700,000 since 2010.” These are words you might expect from the Child Poverty Action Group – but they came from Liz Kendall and Bridget Phillipson, as they outlined how they would develop the government’s child poverty strategy in 2025. Their promise: “an enduring reduction in child poverty in this parliament”.
Reducing child poverty is an urgent goal. In 2023-24, 4.5 million children in the UK (31 per cent) were growing up in relative poverty after housing costs, meaning children and their parents are more likely to be in a precarious position than pensioners or working-age adults without dependent children. In 2022, more than one in ten British 15-year-olds (11 per cent) reported skipping a meal in the past month due to household financial constraints, compared with just 3 per cent in Portugal, the Netherlands and Finland. The UK’s child poverty rate, after housing and utility costs, is higher than in any EU or EFTA nation except Greece.
The government’s child poverty strategy will focus on four themes: increasing incomes, reducing essential costs, building financial resilience, and improving local support. Of these, boosting incomes is the quickest, most effective, and most reliable route to lifting families out of poverty and to improving children’s health, well-being, and educational outcomes.
So, what might the government do? A meaningful strategy must have a target so ministers can be held to account. We suggest the bare minimum would be to lower child poverty from the projected 31 per cent in 2024-25. But even that will be a major challenge (not helped by the welfare reforms announced this spring, which the government believes will push around 50,000 children into poverty overall). On current policies, we project that child poverty will rise during this parliament and the next, reaching 34 per cent (4.8 million children) by 2029-30 – the highest rate since the 1990s and the highest number on record.
But this is a projection, not a prediction. Kendall and Phillipson are consulting widely and listening to families and children in poverty. We learned a great deal from work in the 2000s, when the Blair-Brown government set child poverty as a cross-government priority.
One lesson is that growth in isolation will increase the gap between the middle and the bottom of the income distribution, worsening child poverty. But the Prime Minister is still right to prioritise growth: it creates the fiscal space for more targeted reforms. Getting more parents into work, or helping them earn more, remains one of the most effective (though not guaranteed) ways for out-of-work families to escape poverty. But this will require new policy ideas, as the nature of child poverty has shifted.
Today, more than two-thirds (72 per cent) of children in poverty already live in working families, up from 49 per cent in 2000-01. And nearly nine in ten (87 per cent) of the remaining workless families face barriers to employment: caring for young children, juggling multiple children, or managing disabling health conditions. These gains won’t come as easily as they used to, but better childcare and employment support for parents with health conditions should be prioritised.
When we talk to overstretched parents, they tell us that expecting them to upend their lives for a better job is one stress too many, especially in today’s insecure labour market. That’s why the Employment Rights Bill has real potential to reduce in-work poverty. So too does investment in public transport. Not HS2, but practical issues like better bus services which open up access to job opportunities.
Our modelling shows that in an optimistic scenario – with more parents entering work and rent growth slowed by government action – the number of children in poverty in 2029-30 could be reduced by 130,000. That would also save the Exchequer £2bn annually. It would be important progress – but not enough to prevent child poverty from rising overall.
These baseline projections for poverty are so stark because the government has inherited a plan of ongoing social security cuts. Jeremy Hunt increased support for renters during the cost-of-living crisis – but at the same time froze local housing allowance (LHA) indefinitely. The benefit cap, which is also frozen, holds back more families each year.
The most significant ongoing cut, however, is the two-child limit on benefits paid through Universal Credit, introduced by George Osborne. Its gradual rollout continues to push more children into hardship. As a result, half of all children in poverty now live in families with three or more children – and half of all children in larger families will be in poverty by the end of this parliament. Abolishing the two-child limit (and the benefit cap) would lift a huge half a million children out of poverty. Some suggest compromise options including a three-child limit, or exemptions for children under five. Any reform would be better than none – but half-measures should be temporary and come with a clear timetable for full abolition. Without that, the DWP risks presiding over rising child poverty in this parliament.
Retaining the two-child limit is popular with voters, so ministers may look for other (less efficient) policies. Phillipson could extend the coverage of free school meals to all children in Universal Credit families: the government’s “opportunity” mission is made harder when children’s progress is held back by financially insecure family circumstances. Kendall could restore the coverage and value of the family element in UC, phased out by Osborne, and which would be worth up to £800 per family in 2029, or repeg LHA to local rents.
Rachel Reeves’ first Budget was described as a return to tax and spend, but she was just correcting the “fiscal fictions” that her predecessor had pencilled in for public service spending and investment. In the same way, past governments have banked the savings from future cuts to benefits in ways that are not sustainable for low-income families; these must now be undone to get child poverty under control.
Even if the government implemented every idea in this article, it would only partially reverse post-2010 social security cuts – and fall far short of the Blair-Brown era’s family benefit expansions (which amounted to around £40bn). Resources are tight, but plugging the growing fiscal black hole as the tax revenues from petrol and diesel evaporate would more than pay for a comprehensive child poverty strategy, The government needs to deliver for the UK’s families and prevent another shameful rise in child poverty.
This article first appeared in our Spotlight on Child Poverty supplement, of 23 May 2025, guest edited by Gordon Brown.
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