Poverty Britain

One in five Brits are living in poverty, according to this report

4th December 2018

One in five Brits are living in poverty, according to a damning report issued today by the Joseph Rowntree Foundation, an independent think tank and one of the UK’s leading groups on poverty.

According to the report, child poverty has also risen by 500,000 in the last six years, and in-work poverty has risen faster than employment for over a decade.

The UK Poverty 2018 report shows the scale and extent of poverty in Britain today, and charts its rise over the last two decades. The report looks at children, working-age adults and pensioners, and analyses trends in poverty among each group. Further, it looks to identify the causes behind these trends and suggest solutions to reduce the number of people living in poverty.

Poverty in Britain has risen almost completely across the board, and there are now 8.2 million working-age adults, 4.1 million children and 1.9 million pensioners currently living in poverty. The largest rises in poverty have occurred among working families and lone parent families, who have been disproportionately affected by movement in the housing market and have lost out after changes to benefits and tax credits.

The report also points to the increased prevalence of low-paid work with little chance of progression as a driver behind the increase in working poverty, and states that lone parents are more likely to find themselves in low-paid work.

About eight million people in families with at least one person working currently live in poverty, according to the report, and eight million workers live in poverty — or one in eight — the highest number on record.

Industries with the highest percentage of workers in poverty

Low-paid work plays a large part in explaining the rise in poverty among workers, and though the National Living Wage was implemented and there have been some tax cuts during the period in question, the effect of these has been negated completely by changes to tax credits and benefits.

That’s why one of the Joseph Rowntree’s main suggestions for lifting people out of poverty is for the government to end the freeze on benefits and tax credit a year earlier than is already planned. Doing so would lift 200,000 out of poverty instantly, and see 14 million on low incomes increase their income by an average of £270 in 2020/21.

Another recommendation is for more employers to do their part to end poverty, by committing to a real living wage and, perhaps more importantly, looking for ways to make career progression a viable possibility for more workers. This would have a particular impact on lone parents, who are most likely to work in low-paid jobs, and have seen the average pay gap between them and both the second and primary earners in couples rise considerably, by around £2 an hour in both cases.

Clearly, as a result of all this poverty among parents, poverty among children is rising at an alarming rate, with 500,000 more children living in poverty in the last five years, and most of these coming from working families. This trend is most dramatic among lone parents, among which the increase in children in poverty is twice as much as that of couple families.

Changes in the number of children and percentage of children in poverty since 2011/12

The situation for pensioners in Britain is not quite so dire, with the overall trend in the last 20 years being a downward one. Whereas one in three pensioners lived in poverty in the mid-Nineties, now only one in six does. Though in the last five years, the overall number of pensioners in poverty has increased by 330,000.

The vast majority of pensioners in poverty are either private or social renters, and what rises there has been in poverty among pensioners has been almost exclusively among these groups. Worryingly, the association between renting and poverty among pensioners suggests that poverty among this demographic may rise in future considering the increasing difficulty of buying a home.

It’s time for us to decide what kind of country we want to be. As we leave the EU, we must tackle the burning injustice of poverty and make Britain a country that works for everyone

Housing is a major factor behind the rise in poverty. Rising rents in both the private and social sector, combined with a reduction in the percentage of rent covered by the full housing benefit, means that low-income families are spending more of their income on housing. This change is not seen throughout society; the richest three fifths of people have seen housing costs fall since 2009/10, whereas costs have risen for the poorest. A reduction in the amount of public housing available has driven more low-income families into the private rental sector, and where only 17% on children in the poorest fifth lived in privately rented accommodation in 2005/6, more than a third do so now.

To counter this aspect of the poverty problem, Joseph Rowntree has suggested the government commit to building at least 80,000 truly affordable homes a year at the upcoming Comprehensive Spending Review.

The impact of poverty on long-term financial wellbeing and mental health is also analysed in the report, which found that one in three of the poorest fifth in society have no savings at all, six in 10 are in problem debt and a quarter of the poorest fifth experience depression or anxiety.

Campbell Robb, chief executive of Joseph Rowntree, said: “We are seeing a rising tide of child poverty as more parents are unable to make ends meet, despite working. This is unacceptable. It means more families are trapped in impossible situations: struggling to pay the bills, put food on the table and dealing with the terrible stresses and strains poverty places on family life.

“It’s time for us to decide what kind of country we want to be. As we leave the EU, we must tackle the burning injustice of poverty and make Britain a country that works for everyone.

“We can do this by taking action on housing, social security and work to loosen the constraints poverty places on people’s lives. No one wants to see more families being pushed over the brink.

“We have an opportunity to fix this and ensure everyone can reach a decent standard of living — it is one we must seize to make the country work for everyone after Brexit.”

4th December 2018