Why tackling child poverty isn’t just about cash

Earlier this month, the Government published its Child Poverty Strategy – setting out how it intends to bring down the number of children living in poverty over the course of this Parliament. If the estimates are correct, this would mean 550,000 fewer children living below the relative poverty line.

More money in families’ pockets means more children in warm and safe homes, more nutritious and delicious meals, and hopefully enough to buy a few toys or go on a trip. It’s about having the basics in place, so that a child never has to go to bed hungry, breathe dirty air from mouldy bedroom walls, or worry about how their parents or carers are going to pay the bills.

We warmly welcome the Government’s ambition to tackle child poverty – and yet there is much left to do. Improving the conditions children grow up in is good in and of itself – but it also makes sense as an investment into their physical and mental health, now and in the future.

What will change?

At the core of this plan sits the decision to abolish the two-child limit, a policy which had prevented families in receipt of Universal Credit from claiming child benefit on their third or subsequent child [1]. We’re proud to support several partners including the Child Poverty Action Group, Changing Realities and the End Child Poverty Coalition  who were instrumental and persistent in making the case for this change.

Cash does matter, because that is how families ultimately make ends meet. However, given the strain on the public purse, Government might want to build on the Child Poverty Strategy in ways that don’t require more funding, but smarter and more innovative ways of working.

Improving targeted support to children in temporary accommodation

Another thing to celebrate, and which the Government got completely right, is their focus on Temporary Accommodation in the Child Poverty and Homelessness strategies. Children growing up in B&Bs face layer upon layer of disadvantage – from sharing a single room with multiple family members and having nowhere to play or learn, to being placed so far from their school that they need multiple buses to reach it.

The message of our partners at the Shared Health Foundation [2] and the New Economics Foundation [3] cut through and we were so pleased to see that the Government is committing to:

• A new legal duty for councils to alert schools, GPs and health visitors when a child is placed in Temporary Accommodation.
• A new clinical code for children in Temporary Accommodation to improve data on accidents and admissions to better identify and prevent incidents.

A missed opportunity on auto-enrolment

Where the Government could have gone further is on auto-enrolment – particularly in the context of having expanded eligibility for Free School Meals to children in families in receipt of Universal Credit. Currently, families must apply to receive something they are already entitled to. As a result of these bureaucratic hurdles, around a quarter of a million children are missing out on a hot, nutritious school lunch.

Automating this process would be an investment in equity, as those who are most likely to miss out are those for whom the bureaucratic hurdle is very high – for example, single parents or parents for whom English is a second language. You can read more about the work our partners Bremner & Co and The Food Foundation are doing in this briefing.

More data sharing to address problem debt

Families with children and in particular single parent households are at greater risk of falling into problem debt [4]. Once caught in a ‘debt trap’ every aspect of a family’s life becomes more difficult, often forcing impossible choices onto parents who must choose between eating, heating or other essentials. With potentially multiple bills piling up, coordination among different creditors becomes essential.

We were excited to see the Government’s commitment to improve data sharing around utility bills. Our own research suggests that support for dealing with energy debt to struggling customers is inconsistent and often inadequate [5]. Data sharing between companies and Government departments could open the door to better targeting and offering early help.

However, there are areas where a stronger push from Central Government could unlock better public services. Four years ago, we set up a programme called ‘The Financial Shield’ which embeds financial advice in GP practices. Learnings from our local pilot project show that:

• Local data sharing between councils, housing associations and financial advisors has reduced the burden of enforcement and improved access to financial support [6].
• It allows residents in problem debt who are accessing this service to benefit from a localised ‘breathing space’ – pausing enforcement for up to 60 days.
• By May 2025, over 1,000 residents had been helped by the pilot, and financial gains have been recorded for 345 (30%) of these – a median of nearly £4,000.
• Single parents and people from Black, African, or Caribbean backgrounds were some of the most likely groups to access support.

The programme improved not only families’ finances but resulted in one third of service users making fewer GP visits. Backed by strong data-sharing agreements, this programme shows that well-designed interventions can have positive knock-on effects across multiple public services.

So, what next?

Child poverty is a complex issue that requires a range of solutions. The new strategy rightly recognises the importance of income, but real impact will also be determined by how effectively different systems such as health, housing, education and local government work together around families’ lives.

The evidence from temporary accommodation, Free School Meals, and problem debt above shows better outcomes are often unlocked not only by new funding streams, but by aligning the information, incentives, and responsibilities that already exist.

The work of designing services that work for families and children is already happening in pockets of local innovation across the country. A renewed focus on making more of what we already have means joining up a precious but often disconnected web of information, so children most at risk of being left behind receive the right support at the right time.

Footnotes

[1] This policy has been in place since 2017

[2] ‘How to Support Homeless Families’: Guidance for Local Authorities, Schools and Primary Care – Shared Health Foundation

[3] Nowhere to grow | New Economics Foundation

[4] StepChange (2025) – Child poverty and problem debt

[5] Supporting households in energy debt – Impact on Urban Health

[6] Impact and insights from the Financial Shield project