Children ‘being failed in dual crises of poverty and mental health’

Not having enough money leads to parental stress and guilt, which has a knock-on impact on children, charities said.

Children are being failed by the ‘dual crises’ of poverty and poor mental health charities said (Dominic Lipinski/PA) (PA Wire)

Children are being failed in “dual crises of poverty and mental health”, according to charities which have ramped up calls for the Government to scrap the two-child benefit limit.

The groups said money and mental health are “inextricably linked” and that those children growing up in families facing financial hardship face a knock-on impact throughout their lives.

The report from the Centre for Mental Health, Save the Children UK and the Children and Young People’s Mental Health Coalition recommended the new Labour Government should scrap both the two-child limit and the benefit cap “to ensure all children receive their benefit entitlements”.

The cap, introduced in 2013 under the then-Conservative and Liberal Democrat coalition government as a way of “restoring fairness to the welfare state”, sees the amount of benefits a household receives reduced to ensure claimants do not receive more than the cap limit.

The two-child limit was first announced in 2015 by the Conservatives and came into effect in 2017, and restricts child tax credit and universal credit to the first two children in most households.

Money and mental health are inextricably linked; not having enough money leads to parental stress and guilt, which has a knock-on impact on children, both in the here and now and over the course of their lives

Charities' report

Pressure has been growing on Prime Minister Sir Keir Starmer to axe the two-child limit policy, including from within his own party, but he saw off his first Commons rebellion on Tuesday, with the Government comfortably defeating calls to scrap the policy.

One of his MPs, Rosie Duffield, described the limit as a “heinous piece of legislation” and “a sinister and overtly sexist law” which drove her into politics, while John McDonnell called the policy an “attack on the poorest” and said his party should plan to abolish it “within weeks”.

Education Secretary Bridget Phillipson on Monday said it would be looked at “as one of a number of ways” to lift children out of poverty, with Labour having set up a new taskforce to tackle child poverty.

But Sir Keir has said there is no “silver bullet” and that there was a “complicated set of factors” including pay, benefits, work, housing, education and health at play.

In their report, the charities said: “Money and mental health are inextricably linked; not having enough money leads to parental stress and guilt, which has a knock-on impact on children, both in the here and now and over the course of their lives.”

The latest official UK figures, published earlier this year, showed an estimated 4.33 million children in households in relative low income after housing costs in the year to March 2023 – a record high.

The charities said poverty is “a critical risk factor” which has “surged alongside this rise in mental ill health” in recent years.

Their report said: “Poverty at any age can have a devastating mental health impact but can be especially pernicious for children and young people.”

Their requests to Government include repeating a call for a so-called “child lock” by double-locking children’s social security entitlements to increase by earnings or inflation; scrapping the two-child limit and benefit cap; reforming conditionality within Universal Credit to ensure claimants with health conditions, single parents, and parents of young children are exempt from sanctions; and improving employment support for families through specialist work coaches for parents.

Andy Bell, chief executive at the Centre for Mental Health, said: “Poverty casts a shadow over a child’s mental health, and it’s a shadow that can last a lifetime.

“Effective action from the Government can start to turn this around.”

Priya Edwards, policy and advocacy adviser at Save the Children UK, said: “A childhood blighted by poverty and poor mental health leads to dreadful outcomes for young people that sadly impacts them for the rest of their life.

“Families deserve better than constant anxiety about making ends meet.”

NHS Providers, the member organisation for health trusts, said child poverty “has been made worse by the cost-of-living crisis” and said a cross-government approach to improving the health and wellbeing of children and young people is “vital to protect a whole generation at risk of being left behind”.

It comes as a separate report suggested most people favour a supportive approach over strict job-seeking rules for people on out-of-work benefits.

The polling, released by the New Economics Foundation (NEF), suggested almost two thirds (62%) of people questioned felt job centres should prioritise offering a positive service to people who want support over enforcing sanctions against those who do not follow the rules.

The survey, of 2,041 UK adults in May, also found that almost 70% of people thought it was more important to support unemployed people into quality jobs than pushing them into any job as soon as possible.

Tom Pollard, head of social policy at the NEF, said: “Politicians tend to assume that the public want the strictest regime around out-of-work benefits possible.”

But he said their research showed the public “is ready for our benefits system to shift from a focus on compliance to positively supporting people into good jobs, and our new government should listen”.

A Government spokesperson said: “This government is committed to tackling child poverty, which is why the new ministerial task force launched last week will look at all the available levers across government as we begin this urgent work.

“We will also provide access to specialist mental health professionals in every school so young people can get the support and care they deserve.”