Child poverty and barriers to work

It includes new updated UK estimates of the number of children in poverty whose families have potential barriers to work. For the first time, we also provide estimates for the nations and regions of the UK.

• In 2021/22, almost two-thirds of the children in poverty (64%) – or 2.7 million – were in families with at least one significant potential barrier to work (or extra work).
• Between 2017 and 2022, Wales (65%) had the highest rates of poor children in work-constrained families, compared to England (60%), Northern Ireland (58%) and Scotland (57%).
• Across England, there were an estimated 122,000 children in poverty whose family had three or more work barriers – 26,000 in London alone (21% of the total).
• The government should undertake a cross-departmental programme of reform. This should be aimed at both supporting the basic adequacy of the system, and tackling the barriers to work and opportunity that are keeping families trapped in poverty.

Work is often described as the best route out of poverty, but many of the families Action for Children supports face complex barriers to employment.

Certain groups are particularly likely to experience work barriers: single parents, those with a disability or long-term health condition, and those with caring responsibilities.

In our 2023 All worked out? report, we estimated how many of the children in poverty live in so-called ‘work-constrained families’. These are low-income families who face significant potential barriers to lifting their incomes through work.

• Most of these households are already working to some extent already.
• Many are already maximising their hours by working full-time. Our accompanying briefing looks at why 300,000 families are still in poverty despite being in full-time work.
• Others have challenges that make it harder to take on more hours.

Supporting these families to move closer to work should be a government priority. As we set out in a recent paper 'Breaking through the barriers', curated alongside other leading charities, there is much that we can do.

To produce estimates for the number of children in ‘work-constrained families’, we analysed government data on families in low-income households from the 2021/22 Family Resources Survey.

We categorised the children in poverty according to three characteristics:

1. family type (couples or single parents);
2. The employment status of the parents (full-time, part-time, not in work);
3. The presence of potential barriers that can make it harder for families on low-incomes to take on work or increase their hours.

This includes where:

• They are already maximising their hours by working full-time;
• A parent is disabled or has a long-term health condition;
• A child is disabled or has a long-term health condition;
• They are caring for a child under two;
• Single parents only: they are working part-time and caring for a child up to primary school age (two - 10).

To produce a tighter definition, and reflecting the default assumption that most households should be able to undertake some level of paid work, we only include couple parent families where at least one parent is already working to some extent. As single parents are the main or sole carers for their children, we include both working single parents and those not in work.

This is not an exhaustive list of potential barriers, nor can it possibly capture the great variety of families’ lived experiences. But it does provide a useful basis for improving our understanding of the nature of child poverty and quantifying the potential barriers that make it harder to escape it.

We estimate that in 2021/22, there were 2.7 million children in poverty and in work-constrained families. That’s around two-thirds (64%) of the 4.2 million children in poverty (defined here as less than 60% of the median household income, after housing costs).

This represents:

• 574,000 children who are in poverty despite their parent(s) working full-time – including 324,000 children in couple families where both parents are in full-time work.
• An additional 1,185,000 children in poverty where at least one parent is disabled.
• A further 309,000 children in poverty where at least one child is disabled.
• And an extra 495,000 children in poverty where there is at least one child aged under two.
• There are also a further 162,000 children in single parent families in poverty where the parent is working part-time with a child aged two to 10.

A note on the data: Due to a change in methodology, these figures are not comparable to the 2020/21 figures previously published in our February 2023 report, All worked out?.

A full breakdown of the barriers by family type (couples or single parents) and employment status is included in Table 1. The table shows the number of additional children affected by each subsequent barrier (i.e. those that haven’t already been counted in a previous category) and the cumulative total number of children. This is to avoid double or triple counting where children are affected by multiple barriers.

We have also estimated the number of poor children in work-constrained families for each of the UK nations and regions. Due to smaller sample sizes at the sub-national level, it was necessary to make two adjustments to the methodology:

1. Estimates at the UK nation and region level are based on a pooled five-year sample, with figures presented as an average from 2016/17 to 2021/22. The main pandemic year of 2020/21 was excluded from the analysis due to the impact of the pandemic on data collection, which made the data for that year less reliable than usual.
2. For couple parent families, the different work status categories have been combined together into just one category of “at least one parent in work”.

Table 2 shows the total number and percentage of poor children who are in work-constrained families for each UK nation and region (as an average of 2017-2022).

Of the four UK nations:

Within England the picture is fairly similar across much of the country, with levels highest in the North West, South West, North East, and the Midlands, where around two-thirds of poor children are in in families with barriers to work.

The lowest rate by some margin is in London, where around half of poor children are in work-constrained families (51%). One explanation for this may be access to better, more varied or flexible employment opportunities in London.

We see some evidence for this in the composition of children in work-constrained families across the region:

Figure 2 allows you to dig deeper into the sub-national figures. Select a region to see the number of additional children affected by each work barrier, broken down by family type/employment status.

Remember, the chart shows the number of children in low-income families where the parents are in full-time work (in red), followed by the number of additional children affected by each subsequent barrier.

A note on the data: The figures provided for couples where both parents are already in full-time work should be treated with caution for the North East and Wales due to particularly low sample sizes in these regions.

Most work-constrained families experience one potential barrier to work. But a significant proportion experience multiple barriers, meaning they’re even less likely to be able to improve their income by taking on work (Figure 3).

To get serious about tackling child poverty, the next government must take a broad approach. This should have two goals in mind:

1. Immediate action to shore up the basic adequacy of the system, and;
2. Wider reform aimed at tackling the barriers to work and opportunity that are holding families back.

Our recommendations:

• Fix the basic adequacy of social security: Benefits are too low for families to meet their essential needs. We desperately need to invest in the basic adequacy of social security. The most targeted way of doing that would be to increase the child element of Universal Credit. The Benefit Cap and Two-Child Limit, which push down the basic rate of support further and are major drivers of high and rising child poverty levels, must also be scrapped.
  
• Support families to overcome barriers to work: There are some immediate things policymakers could do to support families experiencing work barriers. In a recent paper, we set out a wide range of ideas for potential solutions. Some actions, like reforming the taper rate and work allowances, could be taken immediately to support work incentives in Universal Credit. In the medium-term, we need a focus on improving the flexibility and security of work, including how we build upon current policies around paid leave, sick pay, reasonable adjustments and childcare. A serious review of how the DWP interacts with claimants and the quality of support they provide is also long overdue. Action for Children will have more to say on this in the months ahead.