Children are now significantly more likely to be growing up in poverty despite all adults in their household working full time than they were two decades ago, reveals new research by the Institute for Public Policy Research (IPPR) and Action for Children.
The research finds that the risk of child poverty in full-time working families has risen sharply since 2000. For couples, the likelihood has tripled – from 2 per cent to 6 per cent – while for single parents, it has risen from 9 per cent to 14 per cent, affecting around 460,000 children across both groups.
The findings highlight a fundamental shift in the nature of poverty in the UK. In 2024/25, almost three-quarters of children in poverty were living in working households, up from around half at the turn of the century – challenging the long-held assumption that work alone provides a reliable route out of hardship.
Children in single-parent families face particularly high risks. Around 15 per cent of children in single-parent households move into poverty over the course of a year – more than double the rate for couple families – while only 22 per cent manage to escape, compared to 30 per cent of children in couple households.
In couple families, the research shows that increases in second earners’ income can have a particularly strong impact on reducing poverty, with more than half of affected children moving above the poverty line when a second earner enters work or significantly increases their earnings.
However, structural barriers mean many low-income working families struggle to progress in the labour market. While higher earnings remain one of the most important routes out of poverty, the analysis shows that second earners are far less likely to see pay rises or increases in working hours than the main earning parent.
High childcare costs, limited availability outside of term time, inflexible jobs and a lack of informal support mean that increasing hours or moving into better‑paid roles often come with stark and sometimes impossible trade‑offs.
In a focus group as part of the research, one parent explained:
“If I was single, I wouldn’t be able to work at all – my youngest isn’t at school yet and we don’t have family nearby. We’ve had to organise everything around childcare just to keep one income coming in.”
These pressures mean that for many families, poverty is not the result of being out of work, but of being trapped in jobs that do not offer realistic opportunities to increase income while balancing caring responsibilities.
To reduce in‑work child poverty, IPPR and Action for Children are highlighting the need for a shift in policy, from a narrow focus on getting parents into work towards supporting them to progress and increase their incomes.
The report calls on the government to: fix universal credit childcare support, including covering 100 per cent of costs (up from 85 per cent) and removing upfront payment barriers and pilot a tailored employment and progression offer for parents on Universal Credit, with specialist support and personalised plans
The report also calls for a Reform the Universal Credit work allowance to strengthen work incentives, particularly for second earners and single parents and to Expand access to flexible, family-friendly and better-paid jobs, including high-quality part-time roles
It also recommends investing in skills and training that work for parents, designed around caring responsibilities and local labour markets
Henry Parkes, principal economist and head of quantitative research at IPPR, said:
“Parents are doing everything we’ve asked of them – working full time and juggling childcare – yet many are still watching their children grow up in poverty. That’s not a failure of individual families, it’s a sign the system is no longer delivering on its basic promise.
“This research shows that it’s not inevitable: when families are supported to progress, especially second earners, their finances improve quickly. The problem isn’t effort, it’s the barriers we’ve built into work and childcare, and those can be fixed.”
Lucy Schonegevel, director of influencing, policy & campaigns at Action for Children, said:
“At Action for Children we see many families who are working as hard as they can, balancing jobs with caring responsibilities, yet still struggling to make ends meet. Our family hubs and crisis grants provide a lifeline for some of these families, however these should not be something they need to rely on. The Child Poverty Strategy offers a strong foundation on which to build, but we would like to see more practical measures to help working families to progress in the labour market and increase their earnings. This should include fixing the many issues with Universal Credit childcare support, piloting an enhanced progression offer for parents on Universal Credit and strengthening the work allowance to improve work incentives – particularly for second earners and single parents.”
