Today’s publication of the Government’s Child Poverty Strategy reflects a much-needed commitment to improving the lives of children across the UK. Child poverty has a devastating effect on children’s lives today and limits their opportunities for the future. 

We were pleased to see the Strategy reference our work on the poverty premium and recognise it as a driver of child poverty, and an area that needs addressing.

Scrapping the two-child benefit cap will lift 450,000 children out of poverty. We want this money to be transformational for children. Therefore, we also want the Government to use its powers to make sure that the companies that supply essentials, like energy and transport, do their part to cut household costs. Millions of families are still struggling to pay for the rising cost of essentials, which are too often even more expensive for families in poverty. This extra cost, the poverty premium, means they will have less of any extra money they now receive to meet their children’s needs. 

When parents spend more just to get essentials, children miss out on things like healthy food, school supplies and activities that support their development and their prospects for the future. In the long run, the Strategy must deliver real change and tackle the drivers of poverty and the poverty premium.   

For example, much more needs to be done to support families with energy bills, which remain hundreds of pounds higher. Cold and damp homes are linked to serious health issues including respiratory conditions, cardiovascular disease, poor mental health, and childhood development problems. The Government should introduce a targeted discount for low-income households that is designed to make sure everyone can afford enough energy to keep them safe and well.  

Our Give Me Some Credit Project also showed that parents are often left with no choice but to use high-cost credit, which can lead to debt traps, when they experience a financial shock like a broken boiler or sudden loss of income. Low income households need access to affordable credit from responsible lenders that can provide wraparound support that helps them to get back on their feet and increase their financial resilience. 

Alongside many of our partners in the sector we have engaged with the Government on the Strategy and believe it marks an important step towards reducing child poverty in the UK. It is a welcome and necessary step toward addressing the deep-rooted challenges faced by families across the UK. However, its success will depend on sustained action by Government, companies and regulators to tackle the institutionalised drivers of poverty and the poverty premium.