Townsend was born in Leicester, the oldest of five sisters. Her father had worked at a factory making jet engines before becoming a postman, while her mother worked in a factory canteen. She attended Glen Hills Primary School, where the school secretary was Mrs Claricotes, a name she used for the school secretary in the Adrian Mole books. At the age of eight, Townsend contracted mumps, and was obliged to stay at home.

Townsend left school at the age of 14 and worked in a variety of jobs including packer for Birds Eye, a petrol station attendant and a receptionist. Working at a petrol station allowed her the chance to read between serving customers.  She married Keith Townsend, a sheet metal worker at 18; the couple had three children under five by the time Townsend was 23 (Sean, Daniel and Victoria), at which point the marriage ended and she became a single parent. In this position, Townsend and her children endured considerable hardship. In Mr Bevan's Dream: Why Britain Needs Its Welfare State (1989), a short book in the Counterblasts series, she recounts an experience from when her eldest child was five. Because the Department of Social Security was unable to give her even 50p to tide them over, she was obliged to feed herself and her children on a tin of peas and an Oxo cube as an evening meal. Townsend would collect used Corona bottles, to redeem the 4p return fee by which to feed her children.  Aged 13, her son questioned one Sunday why they didn't go to animal parks on weekends like other families. She later recounted that it was the start of her writing which became the Adrian Mole books, looking at life through the clinical eyes of a teenager but in a comedic manner. Townsend then chose to research the world of teenagers, and started attending youth clubs as a volunteer organiser. This led to her training as a youth worker.  While employed as a supervisor at an adventure playground, she observed a man making canoes nearby and, because he was married, put off talking to him; it was a year before he asked her for a date. It was at a canoeing course she met her future second husband, Colin Broadway, who was the father of her fourth child, Elizabeth. Subsequently, she became pregnant twice more, but underwent abortions. Ultimately, Townsend came to believe that termination is wrong. Ghost Children (1997) is a novel which draws on these experiences.

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Did she work after she married Colin Broadway?