Money Wellness

cost of living

Published 05 Dec 2025

4 min read

Plan to lift more than half a million kids out of poverty by 2030 unveiled

The government has published a new strategy, promising the biggest fall in child poverty in a single parliament since records began. The headline figure is striking: around 550,000 children are expected to be lifted out of poverty by 2030, with 7.1 million seeing their household income rise.

A mum holding her young son tries to keep warm by the radiator
routledge

Written by: Rebecca Routledge

Head of Content

Published: 5 December 2025

The strategy includes the reversal of the two-child limit and aims to tackle poverty at its roots. That means lowering the cost of essentials, boosting family incomes and improving local services so children can thrive rather than simply survive.

Below, we unpack the key points and spell out exactly what’s being proposed.

Why this matters

The strategy highlights what many families already know all too well: childhood poverty shapes futures. Children who grow up in poverty are more likely to struggle at school, earn less as adults and face disrupted housing, poorer health and a patchier start in life.

The government argues that failing to tackle this doesn’t just limit individual potential. It also holds back the wider economy, locking in avoidable costs for decades to come.

Key measures at a glance

Here's what's set to change.

Help with childcare

  • Extending eligibility for upfront childcare costs to parents on universal credit returning from parental leave.
  • Allowing families on universal credit to claim childcare support for all their children, not just the first two.
  • Creating 3,000 extra nursery places in schools (backed by £400m).
  • Expanding 30 hours of free childcare for eligible working parents of children aged nine months to school age (worth up to £7,500 a year).

Better support for families in temporary accommodation

  • Ending the unlawful use of B&B accommodation for families beyond the six-week limit.
  • Investing £8m in emergency accommodation reduction pilots in 20 badly affected council areas.
  • Providing £950m to deliver up to 5,000 new high-quality homes for families currently relying on temporary accommodation.
  • Placing a new legal duty on councils to notify schools, GPs and health visitors whenever a child enters temporary accommodation, ensuring joined-up support.
  • Working with the NHS to end the practice of new mothers being discharged into unsuitable accommodation such as B&Bs.

Cutting the cost of essentials

  • New guidance for retailers to make baby formula more affordable, including allowing the use of loyalty points, vouchers and gift cards. Savings could reach £540 in a baby’s first year.
  • Extending free school meals to all children in families on universal credit from September 2026 (benefiting more than 500,000 children).
  • Funding more school breakfast clubs.
  • Investing over £600m in the holiday activities and food programme, supporting 500,000 children a year with meals and activities.
  • Raising the national minimum wage again, increasing annual pay for full-time workers by around £900, on top of last year’s record uplift worth up to £2,500.

Boosting family and community services

  • Rolling out up to 1,000 Best Start family hubs across England, backed by £500m, bringing together health, education and advice services under one roof.
  • Transforming crisis support through the £1bn crisis and resilience fund.

Scrapping the two-child limit

  • Ending the two-child limit for universal credit and tax credits.
  • This change alone is expected to lift 450,000 children out of poverty in the final year of this parliament, rising to 550,000 when combined with the wider strategy.

The bare necessities

The government has also committed to reducing deep material poverty for the first time. This looks beyond income alone and measures whether children are missing essential items such as regular meals, safe housing or warm clothing. Currently, 14% of children fall into this category.

The strategy is UK-wide, with ministers holding roundtables in Scotland, Wales and Northern Ireland and pledging to work alongside devolved governments.

Will this really make a difference?

With child poverty at a record high and more than 172,000 children in England alone living in temporary accommodation, the scale of the challenge is huge. But if delivered as promised, the plan could mark a major turning point. 

routledge

Written by: Rebecca Routledge

Head of Content

A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.

Published: 5 December 2025

The information in this post was correct at the time of publishing. Please check when it was written, as information can go out of date over time.

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routledge

Written by: Rebecca Routledge

Head of Content

Published: 5 December 2025

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