Last week, over 8 million households received their first of two cost of living payments, a long overdue recognition by the government that, while the cost of living crisis is affecting us all, its impacts remain profoundly unequal. Households on means-tested benefits will receive £326 directly into their bank accounts, with a further payment of £324 due later this winter, just before the increased energy bills bite even further.
These payments will be welcomed and they will certainly help families meet the rising cost of food and other essentials. But the fact that the payments are a flat rate per household means that, in practical terms, not everyone is getting the same amount. This is because if you give £326 to a single person then they are receiving £326 per household member; whereas if you give £326 to a family of five then they are only getting the equivalent of £65 per household member. Even an extra £65 per person will help, of course, but households with children will have to somehow make the money stretch much further. The cost of living payments will therefore make only a small inroad into reducing the financial and emotional strain of rising prices for families with children.
Viewed like this, the flat-rate payment does not make much sense. The approach is perhaps best understood as part of a wider reluctance by government to adequately support the costs of children, especially when they have more than one sibling. Children in larger families have long been at increased risk of poverty, but recent reductions to social security support have hit larger families hardest. Our research shows that almost all the increases in child poverty between 2012/13 and 2019/20 took place in families where there were three or more children.
This picture is confirmed by a new report from the Institute for Fiscal Studies, which shows that larger families are much more likely to be in poverty. According to the IFS, the absolute poverty rate for children in families with three or more children was double the rate for children who are the only child or who have only one sibling.
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Too often, when we analyse poverty risks, we do so without paying attention to household size. And too often, the policy responses do not address or even recognise how the needs of a household change (and grow) when there are more mouths to feed. With the cost of living payments, as with the £20 uplift to Universal Credit before it, we see policies that ignore household size, failing to provide adequate help to those who desperately need it. This can, and must change: if we are to properly support all children, we need to understand that social security must i recognise and respond to household need.
Today’s welfare system also includes social security policies that explicitly withdraw support from children in larger families. Most notable here are the benefit cap and the two child limit. These policies sever the link between need and entitlement within our social security system, and do significant and likely lasting harm to affected children. Last week, we learned that one in twelve children now live in households affected by the two-child limit. Our qualitative longitudinal research is revealing the multiple ways in which this is affecting children’s lives, including the material impact and the wider social, emotional and relational harms. These effects are likely to be long-lasting and hard to remedy.
While welcome, the cost of living payments represent a policy approach that almost completely ignores the challenges faced by those with children, challenges that are multiplied for larger families. This is especially troubling because living in a larger family is not an exceptional experience. Around 30% of all children in the UK currently live in a
family with three or more dependent children, while many more children will be part of such a family for some part of their childhood. These decisions are not affecting a tiny minority of children.
We all have a responsibility to do more to encourage action to support all families with the costs of children. Poverty analysis needs to pay more attention to household size, and policymakers need to roll back from their recent reliance on flat rate payments. At the same time, we all need to call for an end to the two-child limit and the benefit cap, policies that operate to penalise children because of the number of siblings they have. Without real and urgent change, too many children will continue to experience significant poverty, all because of policymaking decisions that can and must be reversed.
Ruth Patrick (University of York), Aaron Reeves (University of Oxford) and Kitty Stewart (London School of Economics and Political Science) are part of a team, researching the impact of the benefit cap and two-child limit on families with three or more children. Their benefit changes and larger families research programme is funded by the Nuffield Foundation.