The Government understands that parental employment is the best way to tackle child poverty and improve long-term outcomes for families and children. In 2019/20, children in households where all adults were in work were around six times less likely to be in absolute poverty (before housing costs) than children in a household where nobody works.
To help parents into work, the Plan for Jobs continues to provide broad-ranging support for all jobseekers through the Sector Based Work Academy Programmes (SWAP), Job Entry Targeted Support, and the Restart scheme.
The Government also increased the National Living Wage by 9.7 per cent from April 2023, meaning it has risen from £9.50 per hour to £10.42 per hour. This represents an annual pay rise worth over £1,600 to a full-time worker - the largest cash increase in the UK's National Living Wage ever.
To help parents further, changes to childcare announced in the Spring Budget 2023 mean that the Government is extending 30 hours of childcare a week to working parents of children aged 9 months to 4 years; paying Universal Credit childcare costs up front rather than in arrears; and introducing reforms to the childcare sector including changing the mandatory staff-to-child ratio for two-year-olds in early years settings from 1:4 to 1:5.
Moreover, the Government is increasing the Administrative Earnings Threshold from 15 to 18 hours. This is expected to mean that over 100,000 Universal Credit (UC) claimants, including those in work and on lower earnings and non-working or low-earning partners on UC, will receive more regular support from a Work Coach to help them take active steps to move into work or increase their earnings.
These changes are in addition to reforms to the Universal Credit Taper Rate and Work Allowances, saving working families an additional £1,000 per year on average.
To support low-income families further, the Government has increased the value of Healthy Start Food Vouchers to £4.25, helping eligible low-income households buy basic foods like milk, fruit and vitamins. There is also an investment of over £200m a year to continue the Holiday Activities and Food programme, which is already providing enriching activities and healthy meals to children in all English Local Authorities. The Holiday Activity and Food programme benefitted over 685,000 children last summer.
