Failure to invest in children's education is widely recognised as a key mechanism for the intergenerational transmission of poverty. At the same time, rising levels of education among different socioeconomic groups in countries like Bangladesh suggest that poverty on its own is not an adequate explanation for this failure. This article uses survey data on low‐income households in urban Bangladesh to explore what differentiates parents who have managed to send their children to school from those who have not. One factor is education: parents with no education are more likely to have children of school‐going age who are not at school. Different aspects of household vulnerability, as captured by asset deficits, reliance on casual labour and female headship, also play an important role in determining whether children go to school or not. In addition, the article argues that contextual factors have an important influence on how parents imagine their children's future and how children themselves regard education. The hazards of daily life in slum environments, the limited range of job opportunities available and the absence of decent educational facilities all serve to undermine parental commitment and children's motivation with regard to education. The article suggests that the state and civil society should collaborate to promote educational and livelihood interventions which are responsive to the needs of the more vulnerable sections of the poor and to reshape how parents and children envisage the future.