Why small increases in family income can make a big difference to children’s welfare

When we think about children’s social care, we often picture complex family situations and difficult safeguarding decisions. But new research highlights something both simpler and more uncomfortable: for many families, the root of these challenges is money.

Funded by the Nuffield Foundation, our research team linked anonymised data on household income and children’s social care provision for over 111,000 families across six local authorities in England. All these households were claiming means-tested benefits, such as Universal Credit. We used this data to study the link between levels of financial hardship and child welfare interventions. We were particularly interested in children from families living below the poverty line, whose income did not cover their basic living costs. We wanted to see whether referrals and interventions differed for children from these households.

The findings are striking. Children living in households below the poverty line were more likely to end up on child protection plans and were more likely to be referred back to services after a case had closed. In other words, financial hardship didn’t just contribute to problems but contributed to keeping families stuck in a cycle of repeated intervention.

At the same time, the research also offered something hopeful. Even modest improvements in income were found to make a meaningful difference.

During the Covid-19 pandemic, the temporary £20 uplift to Universal Credit reduced the number of families living below the poverty line. Interestingly, while referrals to children’s social care increased slightly for these families, cases were less likely to escalate to more serious interventions. This suggests that when families were under less financial strain, concerns could be identified earlier and resolved before they become crises.

1. It means recognising that poverty matters. Financial hardship should not be treated as a side issue in safeguarding as it is often a key part of the picture. But it’s equally important not to confuse poverty with neglect. Most families experiencing hardship are doing everything they can for their children, often under enormous pressure.
2. It means rethinking prevention. Too often, children’s social care becomes the default service responding to financial stress. If we are serious about preventing problems from escalating, families need access to practical help. For example, some families living in poverty also struggle with debt, housing and council tax arrears. Offering families specialist advice and help with these problems should go alongside support with parenting and relationships.
3. It highlights the importance of income maximisation. Many families are not receiving all of the benefits they are eligible for. Improving benefit take-up, simplifying processes, and reducing stigma could strengthen family stability in a relatively low-cost way.

Finally, the research raises important questions about trust. Parents told us they can feel judged or scrutinised when discussing financial difficulties. If social services are to engage effectively with these issues, conversations about money must be handled with care, and framed as support, not suspicion.

The overall message is clear: financial hardship is not just a background condition but is a key driver of demand in children’s social care. Addressing it is not a distraction from safeguarding; it is central to it.

As reforms to children’s services move forward, there is an opportunity to act on this evidence. By tackling financial hardship earlier, and more directly, we can reduce pressure on services and, most importantly, improve outcomes for children and families.

Download the report ‘Linking household benefits, financial precarity and child welfare’ here.