Decisions made by bankers and stockbrokers in the financial districts of large metropolises seem far away from the realities of children, families and schools. Yet political economy saturates and shapes children’s lives in multiple ways. This chapter explores how psychological conceptualisations of ‘problems’ as within child have always been of concern but may be especially so now given UK governmental responses to the financial recession of 2008, alongside growing advocacy to scale up mental health services globally. The chapter outlines the current political and economic context in which educational psychologists work within the UK in which to embed discussions of educational psychology’s role in the psychologisation of poverty. Particular focus is given to the psychic life of austerity, and specifically to poverty-related stigma as a lived experience and a form of governance. Alternatives to psychologisation are considered, with a focus on the potential for a psycho-politics of educational psychology.