Child poverty is set to increase significantly by 2020, according to new forecasts from the Institute for Fiscal Studies – wiping out the gains made under the previous Labour Government. By 2020 nearly one in four children will be living in poverty.

The IFS report was prepared at the request of the Northern Ireland Executive, and it includes separate projections for Northern Ireland, Scotland, and England and Wales (combined) as well as for the UK as a whole.

Key projections

• Relative child poverty in the UK is projected to rise by six percentage points between 2010 and 2020, from 17.5 per cent to 23.5 per cent. This will reverse all the fall in relative child poverty seen between 2000-01 and 2010-11.
• Absolute child poverty over the same period is projected to increase by 9.6 percentage points. This higher figure is largely the result of technical factors associated with different inflation measures: but even after discounting these, absolute child poverty is expected to be higher in 2020 than a decade earlier.
• Relative poverty in the UK among working-age non-parents is projected to increase by 2.6 percentage points between 2010 and 2020. Absolute poverty for this group is projected to increase by 4.0 points.
• Changes to the benefits system introduced by the coalition government since April 2010 account for almost all of the increase in absolute child poverty projected over the next few years. Relative child poverty would actually have fallen in the absence of the changes. The increase in working-age non-parent poverty as a result of the changes is projected to be significantly smaller.
• Universal credit will reduce relative child poverty by 2.7 percentage points: but its effect is outweighed by the impact of other tax and benefit changes that act to increase poverty.

The report's authors conclude that statutory targets to reduce relative child poverty by 2020-21 are almost certain to be missed by a substantial margin. The government should either produce a credible plan for meeting the targets or set different ones, they say.

The Child Poverty Action Group added: '[These] figures must lead to a rethink of a strategy that not only isn’t working but looks set to turn the child poverty problem into a child poverty crisis in the years ahead. As a result of the government’s flawed strategy, over 1.1 million more children will be living in poverty by 2020-21.'

Source: James Browne, Andrew Hood and Robert Joyce, Child and Working-Age Poverty in Northern Ireland from 2010 to 2020, Commentary 78, Institute for Fiscal Studies
Links: IFS Commentary | CPAG press release | Labour Party press release | Guardian report | Telegraph report