This paper investigates the impact of family income, material deprivation, maternal socioeconomic status and child-rearing behaviour on an indicator of cognitive functioning, using data for children aged 6 to 17 years from the British National Child Development Study. There are large differences in cognitive functioning by income, before differences in other socio-economic indicators had been controlled for. Material deprivation was associated with lower income. Over 50% of children in the lowest income quintile lived in social housing or had no access to a car. The increased prevalence of poor cognitive functioning among children from the lowest income groups could largely be statistically accounted for by the greater material disadvantage of these groups. These analyses provide evidence to suggest that low income has detrimental effects on children’s cognitive functioning through the operation of longer-term material disadvantage, and that these effects may be mitigated by positive parental behaviours.