What has happened to child poverty in the UK over the last 30 years?

Growing up in poverty has highly detrimental impacts on children’s development and their wellbeing in later life. In the UK, where rates of child poverty have been rising sharply in recent years, particularly for those in large families, targeted policy interventions could make a big difference.

In the UK, 3.2 million children are in poverty, a national child poverty rate of 22%, according to the latest figures for 2022/23. Child poverty rates in the UK have long been substantial – and they are high by international standards, especially when compared with other advanced economies. For example, average child poverty rates for 2019-21 were 21% for the UK compared with 20% in France, 17% in Australia, 16% in Germany, 15% in Japan and 12% in Norway.

Child poverty matters because it has negative consequences for children’s development, including their cognitive and educational development, and therefore for how they fare as adults. As former prime minister Gordon Brown once noted, ‘children are 20% of the present but 100% of the future’.

Children’s wellbeing is therefore a concern for society as a whole. Nevertheless, recognition that child poverty should not be a feature of a civilised society, and the role of the state in reducing it, is a relatively recent phenomenon (Platt, 2005).

Further, while the 2010 Child Poverty Act represented a rare moment of cross-party consensus on the ills of child poverty (Walker, 1999) – and recognition that child poverty stems from lack of income – that attitude has not been sustained since.

The history of child poverty in the UK since Rowntree’s study of 1899

In 1899, Seebohm Rowntree – a sociological researcher and social reformer – undertook his first poverty survey of the city of York (Rowntree, 1902). This was a seminal study in demonstrating that poverty stemmed from insufficient income to meet needs, rather than from poor management of income.

He identified the large numbers of working-class families living below subsistence levels – the ‘primary poverty’ line. He estimated that about 10% of the population were in this situation and, while not calculating a separate child poverty rate, he demonstrated that over half of those in primary poverty were children.

Large families, along with those with irregular work, were particularly susceptible to poverty in the late 1800s; and Rowntree’s work vividly illustrated the circumstances to which they were consigned. Even in the presence of regular wages, working-class families with children could not avoid poverty – children were both a cause of family poverty and disproportionately suffered the consequences of it.

Rowntree repeated his study in 1936, providing a comparably stark picture at a time of high unemployment in the country. By his third and final study in 1950, he was more sanguine about poverty rates, at least at the minimal threshold he intentionally employed, particularly among families with children.

In the 1950 study (co-authored with GR Lavers), Rowntree attributed much of the reduction in poverty to the introduction of the ‘welfare state’, following the Beveridge Report of 1942. The survey found that under 2% of the population (and under 5% of the working class) of York were in poverty at this point.

Of those in poverty, sickness and, in particular, old age were the main sources. For those with children, family allowances – which had been introduced in 1946 – were attributed with reducing the poverty risks of those eligible for the allowances by over a quarter. At the time, these were only paid to those with two or more children.

It has been argued that Lavers and Rowntree were overly optimistic in their estimates of poverty reduction as a consequence of welfare state measures (Hatton and Bailey, 2003), though the original study is itself not without its cautions.

Despite the fact that Lavers and Rowntree found no poverty caused by unemployment, they recognised that unemployment benefits – even with other welfare state allowances – were insufficient to keep families out of poverty.

Social security benefits represent the official ‘minimum’ and thus a de jure measure of subsistence levels. Yet their relationship to poverty, as measured by other means, has been highly variable, depending on uprating, eligibility and the existence of other benefits.

This relationship between benefits and poverty was a central part of the measurement of the ‘rediscovery of poverty’ in the 1960s, which challenged the sanguine notion that the introduction of the post-war welfare state had ended the problem.

One innovation in the estimation of poverty – set out in The Poor and the Poorest – analysed family expenditure survey data, which were collected for the purpose of assessing the cost of living (Abel-Smith and Townsend, 1965). This work used a measure of poverty set at 140% of national assistance benefit levels (plus housing costs). The 40% above the level was argued to encompass the extra payments that often accompanied national assistance.

The study highlighted the particularly penurious circumstances of pensioners and estimated that 2.25 million children were living in poverty in the UK in 1960. This work also sparked the formation of the Child Poverty Action Group (CPAG) in 1965. Child poverty had (re)emerged as a salient issue for UK society.

The CPAG started lobbying government and campaigned for increases to family allowances (which became child benefit from 1977 and payable also to the first child) as a non-means-tested supplement to family incomes. It explicitly recognised that children brought extra costs to families, as well as the importance of mothers having control of income that was directly related to the support of children.

Despite the impact of Abel-Smith and Townsend’s work and its contribution to the formation of the influential CPAG, it has been suggested that their choice of poverty threshold overestimated the extent of poverty, and its increase across the 1950s, which was a time of rising prosperity.

More recent work, which uses the now standard relative threshold of 60% of the median, finds a lower rate and a smaller increase overall for the same period (Gazeley, 2016). This study also notes that while Abel-Smith and Townsend did not specify a child poverty rate, both approaches would have resulted in a similar rate at around 13% – about two million children at that time.

While two million or so children living in poverty (and vulnerable to its detrimental effects) is still a large number, a rate of 13% is at the lower end of child poverty rates internationally. It is also well below contemporary relative child poverty rates.

Despite the limits to their analysis, the 140% of national assistance – or supplementary benefit as it became – gained traction as a poverty measure and it was used to calculate statistics on low-income families from the 1970s up to 1988. It was then replaced by households below average income (HBAI). This adopted what is now considered a standard poverty threshold of some fraction of average (mean or median) income. Over time, this settled at 60% of the median.

Initially, HBAI used family expenditure survey data. This was the same data that Abel-Smith and Townsend showed could be used for poverty analysis. In 1994, researchers constructed an analysis of income and poverty stretching from 1961 to 1991 using the HBAI approach of poverty thresholds as percentages of mean income, to examine trends over the period (Goodman and Webb, 1994).

While not providing direct estimates of child poverty, that study showed how poverty rates overall increased from 10% to 20% between 1961 and 1991. There was some fluctuation but little overall increase was seen in the 1960s and 1970s, but a sharp increase arose at the beginning of the 1980s.

This was a period of dramatic rises in unemployment alongside attempts to contain benefit payments. The analysis also showed that the rapidly growing numbers in poverty from 1980 onwards were dominated by families with children (Goodman and Webb, 1994).

Child poverty since the 1990s

From 1994/95, the HBAI statistics moved to using the larger family resources survey data (in place of the family expenditure survey). This provides a consistent series for the last 30 years, with a poverty threshold of 60% of equivalent household income, and breakdowns for different population groups, including dependent children.

Figure 1 illustrates how ‘relative child poverty’, according to this measure, has evolved since 1994/95. It provides both the rate based on total adjusted income (before housing costs) and on incomes after housing costs have been extracted.

By 1994/95, child poverty rates had reached 25%, meaning that one in four children in the country were living in poverty. This was six percentage points higher than the overall rate for the population, at 19%.

Child poverty rates have been consistently higher than overall rates in the UK, though this is not a universal pattern, with many countries seeing lower rates for children. This is determined by policy decisions about the organisation of the social security system.

By the end of the 2022/23 financial year, the child poverty rate had dropped to 22% (compared with 17% for the population as a whole).

Indeed, tackling child poverty was a focus for Tony Blair’s Labour government. In 1999, he announced that ‘poverty should not be a birthright’ and the government’s intention to ‘end child poverty’. While there were some reductions across the 2000s and, following the global financial crisis of 2007-09 – which resulted in a hit to median incomes up to around 2013 – they were not as dramatic as might have been expected following such declarations (see Figure 1).

From 2013, there was a clear, though not dramatic, upward trend as benefits were cut back. Nevertheless, as Figure 2 shows, when using a fixed threshold (held at 2010/11 values), the number of those living below this level did decline more sharply up to 2010/11, plateauing somewhat thereafter.

Figure 1: Relative child poverty, below 60% median equivalised household income

Source: Department for Work and Pensions (DWP), HBAI 1994/95-2022/23, table 4_1tr
Note: Poverty is measured by taking all sources of household income net of taxes, adjusting for household composition, allocating all individuals this equivalent household and counting all those below 60% of the median as low income/poor. The threshold can be based on total income (before housing costs, BHC) or on incomes that have had housing costs deducted (after housing costs, AHC). The period up to 2001/02 is based on Great Britain, while the period from 2002/03 covers the whole of the UK. Estimates for 2020/21 to 2021/22 should be treated with caution due to disruptions to fieldwork.

Figure 2: Absolute child poverty (as at 2010-11 threshold)

Source: DWP, HBAI 1994/95-2022/23, table 4_2tr

In addition, when looking at specific sub-groups of children, it becomes clear that targeted policies were effective in dramatically reducing child poverty for those with the highest rates of poverty. These included the introduction of tax credits for working families and then the broader tax credit system.

Some groups in society are more at risk of living in poverty than others. Research commissioned by the DWP in 2009 drew stark attention to the high rates of poverty among minority ethnic groups at the beginning of the 21^st century.

Figure 3 shows how poverty across different ethnic groups evolved between 2002/03 and the outbreak of the Covid-19 pandemic. While rates for Bangladeshi, black African and Pakistani children remained high, there were dramatic reductions during the decade from 2002/03, when there was substantial investment in financial support for families with children.

This indicates the potential of such policy initiatives to target those children experiencing the greatest amount – and depth – of poverty, even if they remain with much higher poverty rates relative to others in the population.

Figure 3: Child poverty rates by ethnic group, rolling three-year averages, 2002/03-2018/19

Source: Family Resources Survey, 2002/03-2018/19, author’s analysis

Which children are most vulnerable to poverty?

Ever since Rowntree drew attention empirically to the issue of child poverty at the turn of the 20^th century, children in larger families have been particularly vulnerable. For example, in 2006, children living in families with four or more children faced double the rates of poverty compared with other children. This was also a sub-population that saw poverty decline over the decade from 2002/03.

But since 2013/14, there have been substantial increases in poverty rates for children in larger families. Low-income families have faced real income cuts in benefits in this period, and poverty has deepened. Working age and child benefits were frozen, a benefit cap was introduced and there is now a two-child limit for means-tested benefits relating to children.

These decreases in benefit generosity have hit larger families – those with three or more children – hardest. Around 30% of children live in such families. The changes have led to poverty rates of 47% (after housing costs) by 2019/20 compared with rates of 24% among children in one- and two-child families.

The reductions in benefit support were motivated both by efforts to reduce spending, as well as an approach that is concerned with behavioural incentives. The idea is that a reduction in state support would encourage both greater take-up of paid work and induce limits to family size among lower-income families.

This has proved particularly contentious in the case of the two-child limit, which deems children unequally dependent on support depending on the number of siblings they have, rather than their needs.

Research on the two-child limit has also provided little support for the behavioural incentives that it is intended to promote. Yet it has led to greater deprivation among families affected and is estimated to affect one in five children – a total of 2.8 million children – when fully rolled out.

Conclusions

Three things stand out from this short overview of the extent and evolution of child poverty over time.

First, child poverty brings negative consequences for children and consequently for the societies in which they live.

Second, to address child poverty, it has to be recognised as an important policy issue rather than simply as a consequence of parental ‘choices’.

Third, rates of child poverty are directly susceptible to particular policy choices. Starting with family allowances, benefit payments that explicitly address the costs to families have been shown to deliver support to families that can be effective in keeping children out of poverty.

Tax benefit regimes – such as the system that evolved in the UK as part of the wider mission to address child poverty – provide a means to address poverty in low-income working households, in which most poor children will tend to live, even if they bring more families into the means-tested system as a result.

While there are costs associated with such policies, and therefore trade-offs in terms of design, there is little evidence that focusing on parental (dis)incentives, or redefining poverty to be about non-monetary family characteristics, offer much leverage for addressing child poverty.

Ultimately, there is a political choice to be made about what levels of child poverty are tolerable for a nation and the responsibility of governments to address it. International experience demonstrates that child poverty rates do not need to be as high as those in the UK, even during unfavourable economic circumstances.

In the latest UNICEF (United Nations International Children's Emergency Fund) report card, the UK ranked 37^th out of 39 advanced countries. If we care about the future, then the rising levels of child poverty currently seen in the UK should be a serious matter for concern, and should prompt consideration of the sort of society that we want to be.