Child poverty in the UK and Scotland

Executive Summary

Background

The Child Poverty (Scotland) Act 2017 set out statutory commitments to reduce child poverty in Scotland. Since then, the Scottish Government has published three Tackling Child Poverty Delivery Plans setting out how devolved powers and available budgets will drive progress. However, a range of factors that influence child poverty levels remain outwith Scottish Government control.

The UK Government’s recent Child Poverty Strategy highlights a commitment to reducing child poverty through partnership working, respecting devolution settlements and complementing activity across the UK nations. In this context, this report provides an evidence-based baseline to support understanding of the respective contributions of Scottish and UK Government policies to tackling child poverty since 2010.

Methodology

The review adopts a three-strand approach comprising: trends analysis, a strategy overview and a rapid evidence review. Details of the methodology are in Appendix A.

The report addresses the following research questions:

1. What are the trends in child poverty over time between Scotland and the and the UK as a whole? Where and how do these trends differ?

2. What strategic approaches have been taken by governments across the UK since 2010 to tackle child poverty? How do these approaches differ in scope?

3. To what extent can changes in child poverty outcomes in Scotland be attributed to UK Government policy action? Which policies have made significant contributions?

Trends in child poverty over time

Drawing on the four targets set out in the Child Poverty (Scotland) Act 2017 (relative poverty; absolute poverty; child combined low income and material deprivation; and, persistent poverty). Scotland has generally recorded lower levels of child poverty than the UK as a whole. Evidence suggests this is partly explained by lower housing costs and, in more recent years, by devolved policy action to tackle child poverty.

Strategic overview of approaches across the UK and devolved nations

Approaches to tackling child poverty have diverged across the UK and devolved nations. At a UK level, the repeal of the Child Poverty Act 2010 in 2016 signalled a shift away from statutory targets. In contrast, Scotland introduced legally-binding targets under the Child Poverty (Scotland) Act 2017.

Long-term policy scope and sustained commitment to action appear to have played an important role in shaping devolved strategies. In Scotland, this is emphasised through a holistic approach to supporting families, which has been present throughout but has deepened over time.

The most recent UK Government Child Poverty Strategy is intended to complement activity across the four UK nations. It includes a clear commitment to reducing child poverty, alongside improvements on wider outcomes for children and families. This creates potential to support poverty reduction efforts in Scotland and other parts of the UK, particularly where there are shared priorities or opportunities for alignment.

Contributions of UK-wide policies within the Scottish context

Assessing the specific contribution of UK Government policy action to changes in child poverty outcomes in Scotland is challenging. This is due to the complex interaction of devolved and reserved responsibilities, overlapping strategic priorities and policy actions, and wider economic and demographic factors.

This review explores available evidence of UK-wide policies to child poverty outcomes in Scotland across the key drivers of child poverty reduction.

Increasing income from employment

In Scotland, devolved powers over employment law are limited. This means that UK wide employment laws shape labour market conditions and earned incomes in Scotland. This review identified several areas where the UK Government has made a contribution:

• Levels of pay. Increases to the National Minimum Wage and National Living Wage – both reserved to the UK Government – have improved pay. The Scottish Government supports the real Living Wage campaign to meet the true cost of living, but its lack of regulatory powers means that impact relies on voluntary employer adoption. However, pay does not operate in insolation – it interacts with a range of other factors, including the number of hours worked, job security and stability, all of which collectively influence overall household income. Notably, levels of in-work poverty have increased over recent year in both Scotland and the UK.
• Interaction between welfare and pay. Welfare reform increased the emphasis on employment as the most sustainable route out of poverty. However, employment alone is not always sufficient to protect families from poverty, highlighting the importance of the interaction between labour market conditions, earnings and social security support.
• Gender-neutral parental leave and pay policies can support parental employment and family incomes. The UK Government's introduction of Shared Parental Leave and Pay expanded provision, but low take-up and restrictive eligibility criteria have limited its impact, particularly for lower income families, including in Scotland.
• Supporting families during periods of crisis. UK Government interventions were critical in mitigating the most severe labour market and income shocks during the COVID-19 pandemic. However, where this support was insufficient, or where delivery gaps emerged, devolution enabled the Scottish Government to supplement and more effectively target assistance towards families most in need in Scotland.

Support to increase income from social security and benefits in-kind

The Scotland Act 2016 gave the Scottish Government autonomy over a range of devolved benefits. But, responsibility for social security remains shared. Some UK-administered benefits continue to influence income levels for Scottish families. This review found that:

• UK Government welfare reforms since 2010 have had mixed impacts. Universal Credit simplified the process of applying for and moving between benefits, but outcomes varied across family types. Some experienced financial improvements, while others – particularly larger families or those with a disabled household member – have been disproportionately negatively affected.
• Child Benefit provides valuable support which can help to keep families above the absolute poverty threshold. However, its design can disproportionately disadvantage lone parent households.
• The value of benefits directly influences poverty rates. Low benefit levels, or freezes, at the UK level constrain the potential for devolved action to achieve reductions in child poverty, with Scottish actions mitigating negative impacts.
• UK-wide schemes such as Healthy Start have been influential in setting a standard for the provision of nutritional and financial support in the early years. Devolved policies in Scotland – including Best Start Foods and the three Best Start Grants – have gone further by increasing payment levels, reducing stigma, and reducing financial stress among low‑income families with young children.
• The two-child limit resulted in increases in child poverty rates, particularly among larger families. Its removal by the UK Government from April 2026 is expected to reduce child poverty. This change has also allowed the Scottish Government to redirect funding towards wider measures to tackle child poverty. However, the overall impact of removing the two-child limit may be limited by other welfare restrictions that continue to constrain family incomes.

Support to reduce the cost of living

Many low-income families experience difficulties in meeting the cost of living. Both the UK and Scottish Governments have introduced a range of measures to reduce the impact of higher living costs. This review highlights the following contributions:

• Housing: Lower housing costs and a larger social housing sector in Scotland have consistently protected low‑income households from higher poverty rates after housing costs compared with the UK overall.
• Fuel insecurity: The UK Government’s energy bill support package provided cushioning from the worst impacts of fuel insecurity. In Scotland, additional measures have been introduced to further mitigate fuel poverty, but the full impact is not yet evidenced in the data. Ongoing global instability continues to pose a risk to fuel affordability.
• Transport: As a devolved policy area, transport interventions in Scotland – most notably free bus travel for under 22s – have made a positive contribution to reducing household costs for low-income families with children. Evidence on the contribution of UK-wide transport policies is not available.
• Food insecurity: Scotland’s broader package of poverty-related support is contributing to limiting increases in child food insecurity relative to the UK overall, although this cannot be attributed to specific policy interventions in the food insecurity space alone.
• Financial resilience: Scottish Government action has focused on strengthening household financial resilience, while UK Government reforms – such as the Fair Repayment Rate – have complemented this approach by reducing deductions for public debt, delivering financial gains particularly for families with children.

Supporting children and families to thrive

Policy interventions aimed at enhancing life chances and supporting children and families to thrive are largely delivered at devolved level. As such, it is not possible to identify contributions from UK-wide policy directly to Scotland’s child poverty agenda. Still, examples of policy action across the UK can provide useful insights. Key lessons include:

• Early Years interventions are critical to child development and long-term outcomes. Sustained, preventative and family-centred support is most effective when embedded within wider strategies.
• Childcare is devolved across the UK, with England linking provision more closely to work incentives, and Scotland placing greater emphasis on children’s wellbeing. Despite differences, both systems face shared challenges around affordability and access, particularly for lower-income families.
• The UK Government operates measures across the whole of the UK intended to help families with childcare costs. This support is provided through tax-free childcare and Universal Credit childcare costs. Despite providing important financial support, both schemes face challenges which limit their accessibility and impact.

Conclusions

Child poverty strategies cannot be disentangled from wider political priorities and values. Differences in devolution arrangements add further complexity to cross-UK comparisons. As such, each approach to tackling child poverty must be understood within its specific national, institutional, and governance context.

Household income, driven by secure, well-paid work, is central to efforts to reduce child poverty, but Scotland’s ability to influence this is limited. This means employment related outcomes are heavily shaped by UK labour market policies. Devolution has enabled Scotland to mitigate some UK policy impacts, although key areas such as benefit levels and welfare rules remain reserved.

Persistent high costs and wider economic pressures highlight the need for sustained support for families living in low-income households. Across the UK, early intervention through integrated and locally delivered support is critical for families, with examples evident in childcare provision. However, this approach is not yet widely embedded or replicated across other policy areas consistently.

Next steps

To strengthen understanding of policy impact going forward, the Scottish Government will continue working with the UK Government to inform Scotland specific considerations and joint evaluation approaches.