by
Gabriele Mari
6th October 2025
Mounting numbers: A rising tide of child poverty
4.6 million children are expected to be kept under the poverty line by the end of this parliament, up 200,000 from the most recent estimates. That’s one in three children, further rising to more than half of those growing up in larger families. Scrapping the two-child limit, best if in tandem with the abolition of the benefit cap, is widely regarded as the starting point of any credible reform plan. After delaying the publication of its child poverty strategy, however, the Labour government has resisted committing to such changes, which come with a £4.5 billion price tag over the next five years.
The cost of doing nothing
Many have assembled compelling cases for an approach that looks past the spreadsheet and into the everyday reality of living on a low income. But the spreadsheet itself should be overhauled, in addition, to account for the costs of political inaction. Even before the austerity of the 2010s, studies suggested that leaving children in poverty cost the UK at least one point of GDP each year. More updated figures from recent work in other countries are three to five times larger. In fact, choosing not to act on child poverty may alter children’s paths in school, reduce their employment chances down the line, and burden them and their caregivers with stress and ill health. For governments, the result is more costly health care, a larger benefits bill and a shrinking tax base.
Pandemic lessons already forgotten
Only a few years ago, though, child poverty fell across high-income countries at the height of a global pandemic. Lessons from the political choices that made that possible have been quickly forgotten, and poverty rates have climbed ever since. In the US, for example, boosts to income support led to the lowest child poverty rate on record in 2021. The programme chiefly responsible for this success, a newly expanded and no-strings-attached Child Tax Credit, could have paid for itself (and some more), but political infighting led to an end to the policy with its gains undone.
Other countries also experimented with a more adequate safety net in the period. Australia, in particular, increased payments all across its social security system, and managed to reduce child poverty and mitigate the pandemic’s toll on the mental health of adults and children. By contrast, the temporary uplift to Universal Credit in the UK was meagre, and, although it offered an anchor for some amid soaring living costs, it was often not felt at all due to the programme’s complex design features.
Universal credit and the return of sanctions
On top of more generous if time-limited transfers, the pandemic also marked an interruption in the decades-long intensification of benefit conditionalities and sanctions. Employment and job-search requirements can push people not to claim benefits they are entitled to, and the sanctions that enforce conditionalities can be detrimental to employment chances and health as well as child wellbeing. It shouldn’t come as a surprise, then, that those who could rely on a more unconditional kind of support during the pandemic emphasised the reprieve brought by such a welcome and much-needed change, not least for it provided one less challenge in families with young children. The prospect of a return to ‘business as usual’, instead, loomed large on people’s outlook for the future. Fast forward to today, and the two-child limit and benefit cap are in force under Universal Credit, whose sanctioning rates are back up after the pandemic lull. Tellingly, the costs of administering such a ‘state-sanctioned social insecurity system’ are poorly tracked, with official statistics concentrating on fraud and error rather than on government outgoings due to the constant monitoring and assessments.
Luckily, not all governments have moved on from the spirit of pandemic-era interventions, but their ambitions are not broadly shared. Scotland, for one, made its 2021’s Scottish Child Payment permanent and promises to lift the two-child limit starting next year. Its outlook on child poverty compares favourably to the rest of the UK. Differently, UK-wide proposals to exempt only some families from the two-child limit risk introducing a two-tier system where the importance of stable and predictable monetary inflows for children (well into adolescence) is overlooked.
Partial exemptions won’t fix a broken system
After the U-turn on winter fuel allowance and the Welfare Reform Bill, citing self-imposed fiscal rules and purported political costs to avoid reform seems less and less tenable. To change course, the pandemic’s rethinking of social security, mostly short-lived and mostly abroad, is a useful point of departure. Adequate, comprehensive and less conditional support can be the guiding principle of a multipronged child poverty strategy that proves effective as well as (truly) cost-efficient. And while child poverty shouldn’t be reduced to an accounting exercise, when engaging in one, governments should at least get their figures straight.
Gabriele Mari is an Assistant Professor in Sociology at Erasmus University Rotterdam.
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