JRF: Growth alone won’t cut child poverty, as gap between UK countries set to widen

The UK government won't see progress on child poverty by the end of this Parliament – even with high economic growth – if investment in social security does not form a part of its child poverty strategy.  

As the Joseph Rowntree Foundation (JRF) publishes its annual UK Poverty report, new analysis shows that under central OBR projections, only Scotland will see child poverty rates fall by 2029, demonstrating the power of social security policy in tackling poverty.  

In the central scenario, without further policy changes, by 2029:  

• The gap between child poverty rates in Scotland compared to England and Wales will have grown, with Scotland moving from being 7ppts to 10ppts below the rest of the UK
• Almost 1 in 3 children would still be in poverty in England, but in Scotland there would be closer to 1 in 5 children in poverty in large part due to Scotland-specific policies.
• Child poverty in Scotland would be just 70% of the level in England
• If the rest of the UK were to see the same reduction in the share of children in poverty achieved in Scotland, 800,000 fewer children would be in poverty. 

While the Scottish Government does appear to be making progress, it will remain some way off reaching its child poverty reduction targets without further action. [1] 

JRF is also cautioning that children mustn't pay the price for the ups and downs in the economy. Any cuts to welfare spending are very likely to pull more families into poverty, as our social security system is already out of step with the costs families are facing.

Children in England and Wales are already substantially more at risk of poverty 

The leading annual barometer of poverty from the JRF finds that in the UK: 

• 4.3 million children are currently living in poverty
• Child poverty rates are already much higher in England (30%) and Wales (29%) compared to Scotland (24%) and Northern Ireland (23%). 

The child poverty outlook across the four nations is shameful, with only Scotland showing some improvement 

JRF examined changes in child poverty levels between January 2025 and January 2029 based on different assumptions about the growth of the UK economy. If the UK economy grows in line with the Office for Budget Responsibility's (OBR) forecast over the next 4 years, child poverty rates in Scotland, already lower than the rest of the UK, will fall further by 2029. This results in a difference of nearly 10 percentage points between Scotland and the rest of the UK by 2029, up from 7 percentage points in 2025.  

A strong economy can increase wages and employment but will not in itself reduce poverty. Even if the UK economy grows significantly more than expected, overall child poverty rates show little change and could even rise if growth benefits higher income households more than lower income ones. Specific, targeted policies are needed if child poverty rates are to come down.  

JRF analysis shows that none of the 9 English regions are likely to see a fall in child poverty between 2024 and 2029, with 5 regions modelled as having increases over the period and the remaining regions showing no change. 

Outlook in Scotland shows the power of welfare policy change 

In previous years, differences in child poverty rates across the UK nations were driven by lower average housing costs in Scotland and Northern Ireland. [2] 

However, JRF's latest analysis shows a similar reduction in poverty levels before housing costs are taken into account for children in Scotland compared to the rest of the UK. This strongly suggests that welfare policies, such as the Scottish Child Payment and mitigating the two-child limit from 2026, which boost the incomes of the parents of who receive them, are behind Scotland bucking the trend of rising child poverty rates elsewhere in the UK. 

The UK Government's child poverty strategy must abolish the two-child limit and introduce a protected minimum amount of support to Universal Credit 

Later this year the UK Government will publish an 'ambitious' cross-government child poverty strategy. [3] Any respectable child poverty strategy must include action on social security. [4] 

Currently, our social security system doesn't reflect the cost of life's essentials as well as the reality that some families have higher costs or need to make one income stretch further, including larger families and lone parent families.  

These families are disproportionately impacted by specific welfare policies such as the two-child limit [5] and the benefit cap [6]. 

• Children in lone parent families (44%) and children in large families with three or more children (45%) have higher rates of poverty compared to all children (30%)
• Between 2018-19 and 2021-22 children in lone parent families (30%) and children in large families (28%) had higher rates of persistent poverty compared to all children (17%) 
• In April 2024, the proportion of families with three or more children that are affected by the two-child limit exceeded 60% for the first time
• The vast majority (71%) of households affected by the benefit cap are lone parents with children. [7]

Along with abolishing the two-child limit, the UK Government must introduce a protected minimum amount of support below Universal Credit's current basic rate. This would restrict the amount that benefit payments can be reduced by the benefit cap. This would also represent a first step towards an Essentials Guarantee in Universal Credit, ensuring that everyone can afford essentials like food and household bills. [8] 

Paul Kissack, Chief Executive of the Joseph Rowntree Foundation, says:   

“Growing levels of poverty and insecurity are acting as a tightening brake on growth and opportunity. We can't expect children to be ready for school or able to learn if they're going without the basics. Growing up in poverty can also lead to poor health, increasing pressure on the NHS. Child poverty will only be driven down through focused, deliberate and determined policy action. Even very strong economic growth won't automatically change the picture.  

“Policy action must start with the system designed to help people meet their costs of living – social security. At the moment that system is not only failing to do its job but, worse, actively pushing some people into deeper poverty, through cruel limits and caps. The good news is that change – meaningful change to people's lives – is possible and can be achieved quickly. We know this from our recent history, and from different approaches across the UK.  

“The British public believes that everyone should be able to afford the essentials.  With its child poverty strategy later this year the Government has the opportunity to show it agrees. Any credible child poverty strategy must include policies that rebuild the tattered social security system. The wellbeing of millions of children depends on that. And so do the Government's wider ambitions for improved living standards and opportunity.”

Poverty in the UK has returned to pre-pandemic levels  

JRF's annual UK Poverty report also finds that poverty rates in 2022/23 were broadly flat, remaining at a similar level to before the pandemic [9]: 

• Over 1 in 5 people in the UK (21%) are in poverty - 14.3 million people
• Of these, 8.1 million are working-age adults
• 4.3 million are children
• 1.9 million are pensioners.   

Notes to Editors 

[1] The Scottish Parliament has set targets for poverty reduction, including for relative child poverty after housing costs to be below 10% by the end of the financial year 2030/31. 

[2] A chronic lack of good quality social housing has led Scotland to declare a national housing emergency. UK Poverty analysis clearly shows the link between poverty and high and rising housing costs, and if left unchecked, increasing housing costs in Scotland and Northern Ireland could impede progress there in reducing poverty. 

[3] https://www.gov.uk/government/groups/child-poverty-taskforce 

[4] Families with children are more likely to be receiving benefits than families without children. They also find it harder to work full-time, given the cost and availability of childcare. They are therefore more likely to feel the positive effects of welfare policies designed to boost their incomes and lift them out of poverty.  

[5] The two-child limit restricts support through Universal Credit or child tax credit to the first two children in a family for children born after 6 April 2017. 

[6] The benefit cap limits the total amount a household can receive in benefits.  

[7] https://cpag.org.uk/news/why-scrapping-household-benefit-cap-vital-families-children-and-survivors-abuse 

[8] The Essentials Guarantee would embed in our social security system the widely supported principle that, at a minimum, Universal Credit should protect people from going without essentials. Developed in line with public attitude insights and focus groups, this policy would ensure everyone has a protected minimum amount of support in Universal Credit to afford essentials. It would enshrine in legislation:  

• a legal minimum in Universal Credit: the standard allowance would need to at least meet this amount, and deductions (such as debt repayments to government, or as a result of the benefit cap) would not be allowed to reduce support below this level;  

• an independent process to regularly recommend the Essentials Guarantee level, based on the cost of essentials (such as food, utilities and vital household items) for the adults in a household (excluding rent and council tax).  

[9] Poverty rates returned to pre-pandemic levels as incomes recovered after the pandemic, at the same time as a range of temporary pandemic-related support, such as the £20 uplift to Universal Credit, was withdrawn. 

[10] An embargoed version of JRF's UK Poverty 2025 report is available here.

[11] At the Joseph Rowntree Foundation, we work to speed up and support the transition to a future free from poverty, in which people and planet can flourish.