Money, tax and benefits

Living in poverty is not just about not having enough money – it’s also about lack of hope, about powerlessness, and about shame. But accounts of poverty that downplay the role of low incomes ignore the single feature that all those in poverty share: they simply don’t have enough money to live their lives fully, and in a way that most of us take for granted.

It is hard to justify why so many people live in poverty in a country as wealthy as the UK. But one of the key explanations is that the welfare state, designed to protect us all against risks such as unemployment, illness and old-age simply fails to provide an adequate income for families and others when they are unable to support themselves. While on-going welfare reform seeks to tackle some of the more perverse aspects of the current system, the value of benefits continues to wither. Moreover, it is not just lack of income that militates against poor families: evidence shows that they also pay higher prices than others for many essential goods and services.

No anti-poverty strategy can be effective unless it acknowledges the critical role that decent incomes have to play in protecting families and others against poverty. While poverty affects people’s lives in numerous and often complicated ways, the following pages show that money really does matter when it comes to ending child poverty.