Families with three or more children are nearly twice as likely to be living "in hardship" as one or two-child families, according to new research.

The report for the Department for Work and Pensions found that 49 per cent of all large families (defined as those with three or more children) and 70 per cent of those with four or more children were in moderate or severe hardship, compared with 26 per cent of small families.

Large families headed by a lone parent were even more likely to be in hardship - 77 per cent in total.

The study found that family size is an important contributing factor to parents’ hours of work even when other factors are taken into account. Large families with two parents were more likely to have neither parent working more than 16 hours a week, and less likely to have both parents working more than 16 hours a week than small couple families. Among lone parents, 71 per cent of those with three or more children were working fewer than 16 hours a week compared with 51 per cent of those with smaller families.

The research used a sample of families drawn from child benefit records.

Meanwhile, more than 100,000 lone parents were refused budgeting loans from the Social Fund last year because of outstanding debt. Lone parents received 57 per cent of total expenditure on budgeting loans, with a total of 634,000 loans worth an average of about £400.

More than 95 per cent of the money spent on social fund loans was paid back to the government. The DWP massively beat its own loan recovery target of £488m by recovering £520.7m, according to its annual report on the fund.

- For more details see www.dwp.gov.uk/asd/asd5/IH118.pdf and www.dwp.gov.uk/publications/dwp/2003/sf_annualreport02-03.pdf