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The new Child Poverty Strategy: good news for parents on Universal Credit returning to work 

Published: 17 Dec 2025

By Simon Kelleher, Head of Policy and Influencing at Working Families

After campaigning for change, we’re pleased to see that parents on Universal Credit will face one less barrier in getting back to work, with the Government’s commitment in the new Child Poverty Strategy to support families with the upfront costs of childcare. Working Families were closely involved in the government’s consultation, shining a light on the issues faced by families on Universal Credit by contributing real-life experiences that parents have shared on the helpline.

The need to pay childcare costs before you’ve even earned your first pay-check puts many parents in a really tough position. Some end up borrowing money, such as the four in 10 families on a low-income who have taken on loans to manage childcare, tipping families into cycles of debt that can affect them for years to come. And some parents, as we hear on our helpline and in our research, find that paying upfront childcare costs can be the difference in whether they can return to work at all.

Difficulty paying lump sum payments for childcare up front as UC only pay it back after I have paid the providers, leaving me struggling and in debt.

So, we’re pleased to see that the government has listened to our calls and that action is being taken to address the existing illogical system whereby those returning to work after maternity leave can only get financial support with childcare costs if they are starting a new job or increasing their hours, but not if they are returning to the same job with the same hours. The Child Poverty Strategy will change that, meaning women will not have to worry during their maternity leave how they are going to pay for the childcare they need to get back to work.  

We know how much poverty affects the families we support. 43% of the people who contact us for advice are living in relative poverty, and three quarters are living below the minimum income level, that is, the income needed for a basic standard of living. And with the ability to afford childcare determining whether you can work, it’s no wonder that support for childcare is consistently a top 10 issue for people who contact us.  

Here’s just one of the calls we get to the helpline from parents on Universal Credit who are worried about returning to work:  

Amy* was due to return from maternity leave but due to the costs of childcare and needing to balance working with caring for a young child as a single parent she wanted to drop from full time hours to four days per week. 

Due to the current rules, Amy wasn’t entitled to any help with upfront childcare costs because she wasn’t starting a new job or increasing her hours. Despite being nursery policy that children must have a month to settle in, Universal Credit won’t cover these costs. 

Amy was anxious how she’d make ends meet and find the money for the two months of childcare she’d need to cover. Left in an impossible position, Amy’s only options were to borrow from family, which she had already done to cover the mortgage in the last months of maternity leave, or use a credit card or loan to pay for childcare.  

Calls like Amy’s are why the new Child Poverty Strategy released last week is welcome news. Working Families has long campaigned for the Government take action to support parents, particularly mothers, on Universal Credit who are returning to work. To highlight the needs of families, we shared with government ministers the stories we hear of parents’ struggles to find the money to pay for childcare. 

With seven in ten children in poverty living in working households, Working Families’ campaigning doesn’t stop here. We have identified key areas that we are prioritising to ensure working families have the financial security and standard of living to thrive. We want to make sure every parent and carer has quality childcare they can afford, and everyone can access the flexible arrangements they need, which will be in closer reach when the Employment Rights Bill is passed. Not only will the legislation make it easier for families to navigate caring and work responsibilities, the ability to work flexibly can help struggling families manage without putting them under more financial strain.  

If you’d like advice in this area, head to our website.  

*Names have been changed