Tackling the scourge of modern Britain: The policies and investment needed to reduce child poverty

The new Government is currently preparing a child poverty strategy, and hoping to emulate the success of the last Labour government, which lifted over half a million children out of poverty over its first five years. This ambition is needed too, because unless action is taken, poverty rates are expected to rise over the course of the parliament. But Britain in the mid-2020s is very different to the late-1990s – a new approach will be needed to lift children out of poverty over the next decade.

What reduced child poverty in the late-1990s and 2000s, and to what extent can that approach be repeated today? What is the role of work, housing, and social security in lifting families above the poverty line? How much might it cost to deliver a successful child poverty strategy? And what are the costs of not doing so?

1. February 25 @resfoundation Tackling the scourge of modern Britain The policies and investment needed to reduce child poverty Carey Oppenheim, Author and Early Childhood Lead, Nuffield Foundation Aaron Reeves, Professor of Sociology, LSE Alex Clegg, Economist, Resolution Foundation Chair: Mike Brewer, Deputy Chief Executive and Chief Economist, Resolution Foundation

2. 2 Children at-risk-of-poverty based on before-housing-costs thresholds: 2018 Notes: Children defined as under 18s. The poverty line is 60 per cent of the median income before housing costs. Note the after housing costs measure is not the same as that often used in UK statistics: housing costs here also include energy costs, while the threshold used is still before housing costs. 2018 is the latest year of UK Eurostat data.​ Source: Eurostat. @resfoundation The UK is among the worst nations in Europe for child poverty

3. 3 Proportion of children living in relative poverty, after housing costs, actual and forecast: GB/UK​ Notes: GB before 2002-03. Relative poverty is defined as having an income below 60 per cent of the median income in a given year. ​ Source: RF analysis of DWP and IFS, Households Below Average Income; and RF projection including use of the IPPR Tax Benefit Model; ONS, various, and OBR, Economic and Fiscal Outlook, October 2024. @resfoundation Child poverty is forecast to increase dramatically over the next decade in the absence of policy change

4. 4 Proportion of children living in relative poverty, after housing costs, actual and forecast: GB/UK​ Notes: GB before 2002-03. Relative poverty is defined as having an income below 60 per cent of the median income in a given year. ​ Source: RF analysis of DWP and IFS, Households Below Average Income; and RF projection including use of the IPPR Tax Benefit Model; ONS, various, and OBR, Economic and Fiscal Outlook, October 2024. @resfoundation Child poverty is forecast to increase dramatically over the next decade in the absence of policy change

5. Any reduction relative to 2024-25 – below 31 per cent of children in poverty 5 What would success look like? @resfoundation

6. Any reduction relative to 2024-25 – below 31 per cent of children in poverty Getting below the average of the Conservative-led years – below 29 per cent of children in poverty 6 What would success look like? @resfoundation

7. Any reduction relative to 2024-25 – below 31 per cent of children in poverty Getting below the average of the Conservative-led years – below 29 per cent of children in poverty Achieving the lowest rate since the 1980s – below 27 per cent of children in poverty 7 What would success look like? @resfoundation

8. 8 Economic status of families with children in relative poverty after housing costs: GB/UK Notes: GB before 2002-03. Family refers to benefit unit. Hours worked are estimated for some families where data is not available, based on full-time or part-time status. Source: RF analysis of DWP, Family Resources Survey and Households Below Average Income. @resfoundation 70 per cent of families in poverty now have at least one adult in paid employment

9. The employment rate rising by 5 percentage points for lone parents and 2 percentage points for couples with children between 2024-25 and 2034-35 9 We modelled more optimistic outcomes for parental employment and private rent growth @resfoundation

10. The employment rate rising by 5 percentage points for lone parents and 2 percentage points for couples with children between 2024-25 and 2034-35 Private rents 3.5 per cent lower than their projected level by 2029-30 10 We modelled more optimistic outcomes for parental employment and private rent growth @resfoundation

11. 11 Projected proportion of children living in relative poverty after housing costs: UK​ Notes: Relative poverty is defined as having an income below 60 per cent of the median income in a given year. Source: RF analysis of DWP and IFS, Households Below Average Income; and RF projection including use of the IPPR Tax Benefit Model; ONS, various, and OBR, Economic and Fiscal Outlook, October 2024.​ @resfoundation Optimistic outcomes for parental employment and rents would not be enough in isolation to stop child poverty rising

12. 12 Proportion of children living in relative poverty after housing costs, by number of children in the family: GB/UK​ Notes: GB before 2002-03. Relative poverty is defined as having an income below 60 per cent of the median income in a given year. Source: RF analysis of DWP and IFS, Households Below Average Income; and RF projection including use of the IPPR Tax Benefit Model; ONS, various, and OBR, Economic and Fiscal Outlook, October 2024.​ @resfoundation Poverty levels and trends have been much worse for larger families

13. 13 Proportion of children living in relative poverty after housing costs: UK​ Notes: Relative poverty is defined as having an income below 60 per cent of the median income in a given year. ​In our scenario, the two-child limit and benefit cap are scrapped in 2025-26. Source: RF analysis of DWP and IFS, Households Below Average Income; and RF projection including use of the IPPR Tax Benefit Model; ONS, various, and OBR, Economic and Fiscal Outlook, October 2024.​ ​ @resfoundation Ending the two-child limit and benefit cap would make a big difference to the child poverty outlook

14. 14 Proportion of children living in relative poverty after housing costs: UK​ Notes: Relative poverty is defined as having an income below 60 per cent of the median income in a given year. ​In our scenario, the two-child limit and benefit cap are scrapped in 2025-26. Source: RF analysis of DWP and IFS, Households Below Average Income; and RF projection including use of the IPPR Tax Benefit Model; ONS, various, and OBR, Economic and Fiscal Outlook, October 2024.​ ​ @resfoundation Extending Free School Meals, on top of our other measures so far, would take projected child poverty closer to its 2011-12 level

15. 15 Proportion of children living in relative poverty after housing costs: UK​ Notes: Relative poverty is defined as having an income below 60 per cent of the median income in a given year. ​In our scenario, the two-child limit and benefit cap are scrapped in 2025-26. Source: RF analysis of DWP and IFS, Households Below Average Income; and RF projection including use of the IPPR Tax Benefit Model; ONS, various, and OBR, Economic and Fiscal Outlook, October 2024.​ ​ @resfoundation Boosting family support, in addition to our other measures, would take poverty rates to respectable lows in this Parliament

16. 16 Proportion of children living in relative poverty after housing costs: UK​ Notes: Relative poverty is defined as having an income below 60 per cent of the median income in a given year. ​In our scenario, the two-child limit and benefit cap are scrapped in 2025-26. Source: RF analysis of DWP and IFS, Households Below Average Income; and RF projection including use of the IPPR Tax Benefit Model; ONS, various, and OBR, Economic and Fiscal Outlook, October 2024.​ ​ @resfoundation Benefit-uprating conventions could reverse much of the progress in the next Parliament

17. 17 Proportion of children living in relative poverty after housing costs: UK​ Notes: Relative poverty is defined as having an income below 60 per cent of the median income in a given year. ​In our scenario, the two-child limit and benefit cap are scrapped in 2025-26. Source: RF analysis of DWP and IFS, Households Below Average Income; and RF projection including use of the IPPR Tax Benefit Model; ONS, various, and OBR, Economic and Fiscal Outlook, October 2024.​ ​ @resfoundation Benefit-uprating conventions could reverse much of the progress in the next Parliament

18. Scrapping the two-child limit and benefit cap: £4.5 billion in 2029-30 Extending Free School Meals to all families on UC: £1 billion Restoring the Family Element and repegging the Local Housing Allowance to 30 th percentile rents: £3 billion Total package: £8.5 billion / £7.5 bn excl. Free School Meals 18 An “enduring reduction in child poverty” will require some significant new commitments @resfoundation

19. February 25 @resfoundation Tackling the scourge of modern Britain The policies and investment needed to reduce child poverty Carey Oppenheim, Author and Early Childhood Lead, Nuffield Foundation Aaron Reeves, Professor of Sociology, LSE Alex Clegg, Economist, Resolution Foundation Chair: Mike Brewer, Deputy Chief Executive and Chief Economist, Resolution Foundation

20. 20 Please download and install the Slido app on all computers you use Audience Q&A ⓘ Start presenting to display the audience questions on this slide.

21. February 25 @resfoundation Tackling the scourge of modern Britain The policies and investment needed to reduce child poverty Carey Oppenheim, Author and Early Childhood Lead, Nuffield Foundation Aaron Reeves, Professor of Sociology, LSE Alex Clegg, Economist, Resolution Foundation Chair: Mike Brewer, Deputy Chief Executive and Chief Economist, Resolution Foundation

22. 22 Please download and install the Slido app on all computers you use Other than scrapping the two-child limit, which policy area is most likely to have the biggest impact in terms of reducing child poverty over the next decade? ⓘ Start presenting to display the poll results on this slide.

23. February 25 @resfoundation Tackling the scourge of modern Britain The policies and investment needed to reduce child poverty Carey Oppenheim, Author and Early Childhood Lead, Nuffield Foundation Aaron Reeves, Professor of Sociology, LSE Alex Clegg, Economist, Resolution Foundation Chair: Mike Brewer, Deputy Chief Executive and Chief Economist, Resolution Foundation