Millions of people face in-work poverty across the UK

By agency reporter
8 Dec 2013

For the first time in the UK, there are more people in working families living below the poverty line (6.7 million) than there are in workless and retired families in poverty combined (6.3 million).

The change is hitting those who have suffered a sustained and unprecedented fall in their living standards, says a new report

The annual Monitoring Poverty and Social Exclusion 2013, published on 8 December by the Joseph Rowntree Foundation (JRF) and written by the New Policy Institute (NPI) reveals that almost 13 million people are living in poverty in the UK.

The state-of-the-nation document reveals the scale and depth of hardship, as well as monitoring some improvements, across the country.

The report tracks the changes in poverty across a range of indicators. It found people remaining in poverty despite moving in and out of work, with some facing very severe hardship. At the same time the report finds that the support on offer to people who fall on hard times is increasingly threadbare.

The report found that job insecurity is common for millions of people, with one in six of the workforce claiming Jobseekers’ Allowance (JSA) at some point in the last two years.

There have also been big shifts in terms of which groups are experiencing poverty. The largest group in poverty are working age adults without dependent children – 4.7 million people are in this situation, the highest on record. Pensioner poverty is at its lowest level for 30 years.

The report found that:
* The fall in median income over the last two years has wiped out all the gains of the previous decade. But incomes for the poorest 10 per cent have been falling for much longer, since 2004/05.
* Around 6.7 million people, over half of all those in poverty, live in a family with at least one adult who is working – an increase of 500,000 on last year.
* The proportion of low-paid jobs increased in 2012, with three fifths of them being done by the over 30s.
* Alongside the 13 million living in poverty, a further two million people have incomes that while above today’s poverty line, would have been below the poverty line in 2008.
* Among those in work, the number paid below the living wage rose from 4.6 million to five million in 2012. Half of working families in poverty have an adult paid below the Living Wage.
* At the same time, there is a smaller but growing number of people living on incomes below the value of out-of-work benefits in very deep poverty. They are being hit by sanctions, overlapping measures from welfare reform and the falling value of benefits:

The number of job seekers who have been referred for sanctions (1.6 million) and the actual number who had their JSA stopped or reduced (800,000) both doubled between 2010 and 2012.

Some 400,000 families have been hit by overlapping benefit cuts from the under-occupation penalty (commonly known as the 'bedroom tax') and council tax benefit. Two thirds of these families were already in poverty.

Those receiving benefits are not a different group from those in work. Around one in six of the workforce have claimed JSA in the past two years (five million) – two-fifths of these had never previously claimed.

Not all of the findings are negative. There has been an improvement in the labour market with falling unemployment and underemployment, and, over the longer term, improvements in health and education outcomes.

Young adult unemployment has peaked at 21 per cent, and unemployment among the whole population has begun to fall, the report shows.

The number of people underemployed – ether unemployed, economically inactive and wanting work or working part time but wanting a full time job – fell by 100,000 over the last year.

The proportion of pupils in receipt of free school meals not attaining at least five GCSEs A*– C has fallen by 15 percentage points in the last five years.

Julia Unwin, Chief Executive of JRF, commented: “This research shows millions of people are moving in and out of work but rarely out of poverty. Hard work is not working. We have a labour market that lacks pay and protection, with jobs offering precious little security and paltry wages that are insufficient to make ends meet.

“While a recovery may be gathering momentum in the statistics and official forecasts, for those at the bottom, improving pay and prospects remain a mirage. Recent economic improvements do not outweigh the damage inflicted during the downturn to the incomes of the poorest people across the country.

“Our report demonstrates there has been progress in some areas and the tide has turned on employment, but this not been matched by improvements in wages. We must strengthen our efforts to reduce poverty – it is damaging to the people who experience it and harmful to our economic prospects,” she said.

Peter Kenway, Director at NPI and an author of the report, said: “Poorer members of society are under more pressure than at any time since the birth of the welfare state. The value of the safety net for working age adults is now sinking steadily.

"The support on offer to people who fall on hard times is increasingly threadbare, with benefit levels on a downward spiral. A strong safety net to catch those who fall is vital for social mobility – millions are saved by it every year even now – yet no leading politician will defend it.”

* Read the full report here: http://www.npi.org.uk/publications/income-and-poverty/monitoring-poverty...

[Ekk/3]

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