After falling consistently from 1998 to around 2010, child poverty has begun to rise again. Currently, the latest figures we have show that 4 million children are in relative poverty, up from 3.9 million the year before.
1999-2005: Steady progress
From 1998/9 to 2004/5 child poverty rates declined at a steady rate and the 2004/5 government target of reducing child poverty by a quarter was narrowly missed. Studies conclude that this reduction stemmed from a number of policy interventions such as:
- efforts to increase employment for lone parents
- additional benefits targeted specifically at children such as child tax credit
- significant investments in early years education and care.
2005-2010: Rises before progress resumed
Between 2004/5 and 2009/10 the picture is less straightforward. Child poverty began to drift upwards again at the beginning of this period, but it started to decline again from 2008/09. Analysis suggests that there is a close relationship between these trends and changes to the tax and benefits regime. So when the Government increased investments in families’ social security, there was a notable reduction in child poverty.
2010-2020: Sustained rises projected
Finally, projections from the Institute for Fiscal Studies suggest that after a short period of flat-lining, child poverty rates will begin to rise again in the near future. In 2016, the Resolution Foundation projected that by 2020, relative child poverty will have risen by 50%. The increase in relative poverty will undo almost all of the work done reducing poverty from 1999-2010. And a projected increase in absolute poverty (from 16.7 per cent in 2014-15 to 18.3 per cent in 2020-21) will mean that, over a decade, the income of families towards the bottom has actually gone down – something without precedent in modern times. Again, changes to tax and benefits have a key explanatory role. For example, research suggests that the recent changes to upgrade benefits using CPI rather than RPI will erode the value of benefits over time. This would therefore be a key driver of projected increases in child poverty.