Universal credit rise lifted 400,000 children out of poverty

The government’s £6 billion universal credit boost helped lift around 400,000 children in the UK out of poverty during the first year of the pandemic.

New statistics indicate that years of continued rising relative poverty were reversed after ministers introduced a temporary extra £20-a-week to universal credit in April 2020, alongside extra housing support, furlough and other measures in response to the Covid outbreak.

Collectively this saw the incomes of the poorest fifth of households rise by four per cent and unemployment stay low, with campaigners heralding this as proof that investment in social security was an effective way of lifting children out of poverty.

Campaigners believe that the statistics showed this progress was likely to be a one-off as the withdrawal of the extra £20 a week, coupled with the rising costs of food and energy and below-inflation benefit increases, are likely to take their toll on household living standards from this month.

The £20-a-week boost, along with other pandemic support measures, were cancelled in October, under the belief that the government’s efforts would be better focused on getting people into jobs and better paid work as the economy opened up.

With a growing cost of living crisis, living standards currently falling at the fastest rate since the 1950s and the energy price cap, pressure on already struggling low-income households is accelerating.

The Child Poverty Action Group said that the figures showed ministers had ‘the power to protect children from poverty’ but their failure to offer serious help in the recent Spring Statement indicated they had ‘turned their backs’ on families struggling with the cost of living crisis.

Alison Garnham, CPAG chief executive, said: “Many of the children who were lifted out of poverty by the £20 increase to universal credit have already been forced back over the brink by the government’s actions. And as millions struggle with spiralling costs, we know the picture will worsen.”