Employment alone won’t turn the tide on child poverty, new analysis warns
Published: 12 November 2025
The UK government’s reliance on employment growth to tackle child poverty will fail to deliver the reductions needed, unless it is backed by the removal of the controversial two-child limit and the benefit cap, according to new research.
The UK government’s reliance on employment growth to tackle child poverty will fail to deliver the reductions needed, unless it is backed by the removal of the controversial two-child limit and the benefit cap, according to new Nuffield Foundation funded research.
The analysis, by the University of Glasgow and London School of Economics and Political Science (LSE), shows that even if the government achieves its ambitious target of raising employment from 75% to 80% by 2029/30, this would lift only around 100,000 children out of poverty.
With existing policies such as the two-child limit and benefit cap set to push 200,000 more children into poverty by the end of this Parliament, this would mean a higher child poverty rate at the end of this government than at its beginning. There are currently 4.5 million children living in poverty, most of them already in working households.
Keir Starmer has said that reducing child poverty should be treated as a test of his government’s term in office. The new analysis underlines the importance of urgent and far-reaching policy action, beyond support for employment, if the government is to meet this test.
The analysis comes as the government prepares to announce its Child Poverty Strategy around the same time as the November 26 budget.
The analysis concludes: “Combined with the high prevalence of child poverty in working households and the limited impact wage increases can have on a family’s risk of being in poverty, it is clear that employment alone cannot make a significant impact on rates of child poverty. Investment in social security must be a key pillar of the upcoming Child Poverty Strategy, starting with the removal of the two-child limit and benefit cap, as the most effective way of lifting children out of poverty.”
Professor Ruth Patrick, of CASE and the University of Glasgow, said: “The mantra that work is the best route out of poverty has been a popular one, which has dominated political and policy discussions for many years now. But what our new analysis shows is that we cannot talk with legitimacy about reducing child poverty unless we also take action to invest in social security as an essential ingredient in meeting the additional needs that come with children and helping ensure every child has the very best childhood possible.”
Professor Kitty Stewart of LSE’s Centre for Analysis of Social Exclusion (CASE), which is publishing the briefing on November 12, said: “More and more parents are in work, and working longer hours - yet child poverty continues to rise. This is because wages don’t adjust to family size, and because balancing paid work with care means many parents aren’t free to do the hours or take the jobs they might at other times in their lives. The UK needs to learn from other countries and from its own past policy successes: reducing child poverty means providing adequate support through child benefits to help families meet the temporary costs of raising children.”
Findings show that without action, the number of children living in poverty in the UK is set to rise from 4.5 million to 4.7 million by the end of this Parliament. Achieving an 80% employment rate would only modestly reduce child poverty, lifting around 100,000 children over the poverty line.
Reaching this highly ambitious employment target would be extremely costly. Costs of past employment programmes suggest it could cost £3 billion/year in personalised employment support to move 200,000 parents into work by the time of the next election (net of expected welfare savings), without including extra costs of barriers such as childcare access, transport and lack of local job opportunities. Reaching the 80% employment target would require 2.1 million people in work, including nearly 600,000 parents.
Work doesn’t guarantee escape from poverty. Over 70% of families in poverty now have at least one adult in work, compared to 49% in 2000/01. Families with young children, disabilities, or health conditions face the most persistent barriers.
Evidence from previous decades shows that investment in benefits such as Child Tax Credit played a decisive role in reducing child poverty, while cuts and freezes to family benefits have driven recent increases.
Researchers say the upcoming Child Poverty Strategy presents a crucial opportunity for the government to reset its approach. The briefing urges ministers to combine employment initiatives with meaningful investment in the social safety net, recognising the additional costs families face while raising children. The most urgent actions are to remove the two-child limit and benefit cap, and to restore the value child benefits have lost over the last 15 years, and ensure they keep pace with price and wage inflation going forward.
Alex Beer, Assistant Director of Strategy at the Nuffield Foundation, said: “This research is an important reminder that the vast majority of children in poverty live in working families. The health, care and other barriers that parents face mean that increasing hours of work is not a practical or cost-free option for many. The forthcoming child poverty strategy needs to take a multi-faceted approach that includes improvements to the social security system for families with children.”
First published: 12 November 2025