The real cost-of-living-crisis: Five million British children 'sentenced to life of poverty thanks to welfare reforms'

Charity’s report blames benefit cuts, increased cost of living and stagnant wages for looming crisis

Vicky Cunningham and her son, Oliver-James, are on the cusp of poverty in West Yorkshire (Elizabeth Dalziel)

Five million children in Britain could be “sentenced to a lifetime of poverty” by 2020 because of welfare reforms, according to research from Save the Children.

Cuts to benefits, the rising cost of living and years of flat wages have created a “triple whammy” for children, the charity said. It argues that children have borne the brunt of the recession in Britain, and now represent the “face of poverty” in the UK.

Policies such as the “bedroom tax” combined with the slashing of tax credits and council tax relief mean “the social safety net no longer acts as a sufficient backstop for poor families”, claims the Save the Children report.

Soaring food prices and childcare costs have also hit families, with the cost of food rising by 19 per cent when compared with other goods between 2007 and 2011. A nursery place for a child under two cost 77 per cent more last year than it did a decade ago.

A significant proportion of families across England – as high as 28 per cent in London – are skipping meals in a bid to make ends meet. And in many areas, more than one in 10 families cannot afford to buy children new shoes when they need them.

Ending child poverty by 2020 is a target to which all political parties have committed. But the Save the Children report found that the number of children living in poverty could actually rise by 1.4 million by 2020 – an increase of 41 per cent on the 3.5 million children currently living in poverty. Political promises to eradicate child poverty by 2020 are “no longer credible”, says the report.

Half of low-income families have seen their incomes decrease in the past five years, according to the charity. Around 70 per cent had found it difficult to meet payments, and more than two in five said they had got into debt as a result.

Without “dramatic change” we risk “writing off the future of millions of British children, giving them an unfair start in life”, warned Justin Forsyth, chief executive of Save the Children. “Far too many of our children are living in cold and damp homes, without healthy food, with parents who can see no end to their situation.”

Responding to the findings, shadow Work and Pensions Minister Rachel Reeves said: “Under David Cameron child poverty is set to rise, not fall, and the cost-of-living crisis has left millions of families struggling to make ends meet.”

But the report’s authors said: “We do not believe any party is showing a sufficient strategic response to the scale and seriousness of the problem.”

Work “has ceased to become a sufficient solution to poverty for families with children”, the report warns. Two-thirds of children in poverty now live in working households, a rise of 20 per cent since 2003.

The study, A Fair Start for Every Child, was undertaken by Landman Economics and added projected social security cuts to existing Institute for Fiscal Studies estimates. “The UK remains one of the most unfair countries in the developed world – the lottery of birth still determines millions of children’s chances in life,” it warns. And by 2020 child poverty could “be around the highest ever recorded in the UK... the highest for a generation. The face of poverty in the UK will be that of a child, usually within a working family.”

A minimum income guarantee for families with young children, high-quality and affordable childcare, and a mission to ensure all children are reading well by the age of 11 are among its recommendations.

A Government spokesperson said: “The Government is committed to ending child poverty by tackling its root causes as part of our long-term economic plan. Our reforms will improve the lives of some of the poorest families in our communities by promoting work and helping people to lift themselves out of poverty.

“With the economy growing, we have just seen the largest rise in employment for over 40 years, and unemployment is falling, with 100,000 fewer children living in workless poor families. Universal credit will make around three million households better off and lift up to 300,000 children out of poverty.”

Case study: Family on £250 a week

Vicky Cunningham, 23, is a part-time student and her partner Simon Giles, 26, is a factory worker, earning £250 a week. They live in Bradford with their 15-month-old son, Oliver-James. Vicky says:

I worry about money because we live off one income, so we really struggle. Our biggest costs are the rent, the council tax, the water, food, those sorts of things. We’ve noticed a rise in our weekly shopping recently. It’s gone from between £30-£50 a week to £80-£100 a week.

We don’t receive any benefits, we only get working tax credits and child benefits. Child benefit is £81 a month and the working tax credits were £430 a month but for some unknown reason it’s now gone down to £350.

I had to stop work when I had Oliver-James. I do eventually want to go back to work, but at the moment I’m waiting for him to get his entitlement. I’m at college part-time at the minute because I want to become an early years practitioner when Oliver-James is older. Fortunately my childcare is funded by the college. If I went back to work full time, childcare costs would use 60 to 70 per cent of my wages up straight away.

I worry about Oliver-James not being able to fulfil his potential and not being able to take on all the opportunities. We’ve opened a bank account for him and we do use it, but unfortunately it’s rare that we have any spare money to put in.

We got a fridge freezer from Save The Children, which means we can now buy the frozen veg from Iceland, which saves a lot of money a month. Fresh fruit and veg is expensive.

I think the government need to take a strong look at how much finance and childcare they provide for working families. We’re out of the bracket for help from the government but we’re still classed as disadvantaged. They need to help us to help the next generation.”

How do you measure child poverty?

Defining poverty is not easy, not least because it is all relative to where people happen to live. The report states that while child poverty in Britain “isn’t comparable to the types of poverty we see in the developing world, neither is it a statistical creation: it has real-world impact.”

Relative poverty looks at how much people have to live off compared to others, at any given time. It is the official Government measure used to define poverty, with those on 60 per cent or more less than the median income deemed to be in that category. While they may not be starving to death, they are poor in terms of not being able to live in the manner of the majority of the country. The poverty line for a family of four is £357 a week after housing costs.

Child poverty in numbers

77% Increase in the cost over the past decade of a nursery place for a child under two

28% Proportion of children in London skipping meals

1.4 million Predicted rise in the number of children living in poverty by 2020