UK Child Poverty Hits Record High Ahead of Budget

LONDON — Campaign groups and analysts are calling for urgent, targeted action as child poverty in the United Kingdom reaches a near-record high, placing immense pressure on the Labour government ahead of Chancellor Rachel Reeves’ annual budget announcement this Wednesday (November 26).

Around one-third of Britain’s children (4.5 million) currently live in relative poverty, defined as living in a household earning below 60% of the national median income after housing costs. Crucially, one million children are classified as destitute, lacking basic needs like food and warmth, according to the Joseph Rowntree Foundation.

The primary driver behind the rise, which has increased by almost 20% since 2012, is widely identified as welfare reforms implemented during the previous Conservative-led austerity program. Experts, including the Resolution Foundation, point specifically to the two-child benefit cap, which denies parents benefits for their third and subsequent children.

The cap disproportionately affects larger families and is heavily linked to the fact that almost half of children in Black and Asian communities are living in poverty, compared with 24% of White children.

The Chancellor has been grappling with the political and financial dilemma, balancing the party’s manifesto pledge not to raise taxes on working people with the moral imperative to tackle poverty. However, reports now suggest the government will announce the full abolition of the two-child limit in the budget, a move that could lift 330,000 children out of poverty overnight at an estimated cost of around £3.5 billion.

The Resolution Foundation estimates that without such policy changes, the relative child poverty rate will soar further, reaching 34% (4.8 million children) by the end of 2029-30, a higher rate than observed at any time since 1961.

The crisis is not limited to non-working families; approximately 70% of children living in poverty have at least one parent in work. Expensive childcare—costing up to 60% of a single parent’s net household income—combined with high housing costs leaves families like Thea Jaffe’s, a full-time London worker earning £45,000 a year, struggling to pay bills and reliant on charities like Little Village for essential supplies.

“People have got no resilience left,” warned Sophie Livingstone, CEO of the baby bank Little Village, highlighting the failure of the social security “safety net.”