Save, make, understand money

Household Bills

Four million children live in poverty as families struggle to buy essentials

Rebecca Goodman
Written By:
Rebecca Goodman

One in five people in the UK were living in poverty in 2020/21, and of those 3.9 million were children, according to a stark report.

This equates to 13.4 million people in total with 7.9 million working-age adults and 1.7 million pensioners.

The overall rates of poverty fell from 2019/20, partly because of successive coronavirus lockdowns and a £20 weekly boost to Universal Credit and Working Tax Credits, according to the Joseph Rowntree Foundation report.

While the latest statistics date from 2020/21, the charity warned that things are likely to be much worse now because of the cost-of-living crisis.

Children are the most likely to be in poverty

Despite increases to benefits, poverty rates for families in receipt of Universal Credit or equivalents remained very high in 2020/21, at 46%.

More than one in four children were living in poverty (27%) in 2020/21 and around four in ten children in lone-parent families were in poverty, compared with one in four of those in couple families.

Of the children in poverty, one million were aged under four, 1.3 million were aged five to 10, 1.1 million were 11 to 15 and 500,000 were 16 to 19.

Families with more children were more likely to be in poverty and the child poverty rate for children in families with three or more children was almost twice as high as the rate for children in one- or two-child families (38% compared with 21% and 22% respectively).

Low-income families struggling to buy essentials

The direct impact of the pandemic has lessened since the last set of data was recorded but the Foundation said employment remains below pre-Covid levels and pay has not increased in line with inflation.

It also said that because inflation has risen so quickly, the removal of the £20 uplift to benefits in October 2021 has been even more severe.

Benefits rose by 3.1% in April, yet as inflation was so much higher than this, the report said there has been the greatest fall in the value of the basic rate of unemployment benefits since 1972.

Across the poorest fifth of UK families, around six in 10 can’t afford an unexpected expense, over half are in arrears, a quarter are using credit to buy essentials, and over seven in 10 are going without essentials, according to the charity’s October 2022 data.

The cost-of-living crisis has also led to half of the poorest fifth of families reducing the amount they spend on food for adults, four in 10 spending less on food for children, half reducing the number of showers they have, and six in 10 heating their home less.

This is echoed in data from the Trussell Trust which shows a huge increase in food bank use.

‘Basic rates of benefits are inadequate’

The report stated that “basic rates of benefits are inadequate and do not allow recipients to meet their essential needs”.

It said certain things in the benefit system are designed to keep people in poverty including: the two-child limit in income-related benefits, the benefit cap, and the five-week wait for the first Universal Credit payment.

The Foundation is calling for basic benefit rates to be reset and said the government needs to ensure “they cannot be brought below these rates through the repayment of advances or other deductions”.

‘Poverty is an avoidable tragedy’

Imran Hussain, director of policy and campaigns at Action for Children, said: “In policy terms, poverty is an avoidable tragedy. We know what works to cut poverty and we know which policies drive poverty levels up.

“Despite progress during the pandemic thanks to the temporary increase in Universal Credit, the end of that support and the worst cost of living crisis in generations has undoubtedly pushed poverty and hardship levels firmly in the wrong direction once again.

“As this report shows, supporting low-income families directly through the social security system is the best tool we have for tackling child poverty.”