Solutions to poverty

What can be done to reduce child poverty? 

Adequate social security

The most urgent policy need is to guarantee adequate financial support for families through our social security system. We need a social security system that’s fit for the 21st century. Evidence tells us that this is how to make a real difference to children’s welfare. 

Many countries with low child poverty rates pay universal child benefit for all children, recognising that this is a time of the lifecycle when all families could use extra support. 

Balancing work and care

We also need policies that allow parents to choose the right balance of work and care for their family. 

This includes:

• adequately paid maternity, paternity and reformed parental leave
• rights to flexible and part-time working
• affordable and accessible childcare that parents trust, including after-school and holiday clubs

Improving quality of work

Policies that improve the quality and pay of work are also crucial.

These include:

• minimum wages
• guaranteed hours
• employment security
• pathways that allow progression in work
• access to education, training and employment support

Reducing pressure on family budgets

We also need to reduce cost pressures with things like:

• free travel for young people, such as London’s Zip Oyster scheme and free bus travel for under-22s in Scotland
• access to healthcare and education 
• addressing the costs of housing and utilities 

Implementing a child poverty strategy 

We need political commitment to create a good society for children and end child poverty as an urgent priority. This should be made concrete in the form of a comprehensive child poverty strategy to ensure action across all levels of government, a broad range of policy areas, key targets, timelines and regular reporting. 

In 2017 the Scottish Parliament unanimously passed the Child Poverty (Scotland) Act setting child poverty targets and requiring:

• the Scottish government to produce child poverty delivery plans and annual reports, and   
• local and health boards to jointly publish annual reports on what they are doing to reduce child poverty in the local area. 

How to stop child poverty increasing

Remove the two-child limit

The two-child limit restricts support in universal credit and tax credits to two children in a family. The two-child limit breaks the link between what children need and the support they receive. 

Removing the two-child limit would lift 300,000 children out of poverty and mean 800,000 children are in less deep poverty.

Abolish the benefit cap

The benefit cap restricts the amount of support a working-age household can receive from the social security system. Those most likely to be capped are lone parents, large families and families with young children. 

Abolishing the cap would mean that about 300,000 children would be living in less deep poverty.

The Scottish government are mitigating the benefit cap as fully as possibly through discretionary housing payments. 

Reduce deductions from universal credit  

Debts, including money owed to utility companies, council tax, rent and court fines are automatically deducted from people's benefit payments. These deductions make it even more difficult for families to make ends meet.

Lowering the maximum deduction rate from 25 per cent of the universal credit standard allowance to 15 per cent would provide up to £58 more a month for a couple and up to £37 more a month for a lone parent.

Remove the five-week wait at the start of a claim for universal credit

When someone starts a new claim for universal credit, they must wait for at least five weeks for their first regular payment. Advance loans are available, but these must be paid back out of future payments. There is much evidence of the hardship, anxiety and debt that many experience as a result. 

Removing the five-week wait by making advances non-repayable would ensure no one in need has to struggle without any income, and avoid hardship further down the line.

Review the support for housing costs in universal credit

Housing is a major element in the budgets of poor families. But the current system does not necessarily cover the full costs that families must pay.

Ensuring that the local housing allowance is increased annually in line with local rents would help families meet their actual housing costs and reduce the number of children who are homeless and growing up in temporary accommodation.

Remove 'no recourse to public funds' for families  

‘No recourse to public funds’ is a condition attached to visa conditions for many migrants. It restricts access to most benefits, and many of the families affected struggle to make ends meet.

Removing the 'no recourse to public funds' condition for families with children would help 175,000 children.

How to prevent and reduce child poverty

Increase child benefit and make it universal 

Child benefit provides a secure income source to families, helping to prevent and reduce child poverty. Since 2010 child benefit has lost 20 per cent of its value and the higher-income charge has undermined the universal principle of support for all children.  An increasing number of families and children are falling out of the system. 

Child benefit should be increased by £20 per child a week. The higher-income charge should be removed to make child benefit universal again. 

Expand free school meals

Free school meals (FSMs) are school lunches provided to children across the UK. The current eligibility for means-tested FSMs is stringent, meaning 900,000 children in poverty in England alone miss out.

Free school meals should be available to all children at all stages of schooling.

Regularly uprate benefits for children

The value of working-age benefits and children’s benefits have been regularly either frozen or increased below inflation since 2010, failing to provide an adequate standard of living and reflect the needs of children and families today.  

The government should introduce a statutory duty to uprate all benefits, and related thresholds, by prices or earnings, whichever is higher.

Reform childcare

The UK system of subsidising childcare costs is complex for parents to negotiate, and support through universal credit leaves families with a shortfall and requires monthly reporting of costs. A simpler system would enable more parents to enter work or work more hours. This would help to reduce poverty. 

The government should commit to reforming childcare to reduce the high costs and improve the quality of childcare for all families by moving towards a universal, publicly funded system. 

Increase child maintenance payments for lone parents

Child maintenance can be an important source of income for lone-parent families and help to reduce poverty. It is estimated that if all maintenance due was paid in full, 60 per cent of UK children currently not benefiting from maintenance would be lifted out of poverty.

There should be a review of the Child Maintenance Service, including charges and enforcement measures, explicitly focusing on reducing child poverty in lone-parent families. 

Raise the minimum wage

Low wages and job insecurity are important factors driving poverty. Single-earner families are often unable to escape poverty through their own earnings. The minimum wage for 2024 is £11.44 per hour for people aged 21 and above, with lower rates for younger people.

The TUC has proposed that the national minimum wage should be set at £15 per hour as part of a more general strategy to raise wages across the economy. Higher wages would not only increase family income but also reduce reliance on means-tested benefits.