Report finds people with poor health 70% more likely to be in persistent poverty

By agency reporter
June 23, 2018

Among 25-54 year-olds, 28 per cent of those with a longstanding health problem, and 40 per cent of those with a mental health problem, are in relative poverty (i.e. they have an income below 60 per cent of the median income after deducting housing costs). This compares to around 18 per cent for those without longstanding health problems.

In 2016–17, 27 per cent of 25-54 year olds (6.9 million people) reported having a longstanding illness, of which 18 per cent (1.3 million) reported having a longstanding mental health problem. The number with a longstanding mental health problem rose by 250,000 since 2013–14.
 
These are among the key findings from IFS’s annual report on Living Standards, Poverty and Inequality in the UK: 2018, which is funded by the Joseph Rowntree Foundation.

The report also found that for 25-54 year olds:

  • Individuals with a longstanding illness are much less likely to be in employment, especially if they have a mental health problem. Around 88 per cent of the healthy population are in paid work, compared to 70 per cent of those in poor health.  Only 53 per cent of those with a mental health problem were in paid work in 2016–17.
  • Poor health is particularly associated with long periods out of employment. More than half of those out of paid work for at least three years have a longstanding health problem, and one in six have a mental health problem. Around 70 per cent of men out of employment for at least three years have a longstanding illness, and around a quarter have a longstanding mental health problem,
  • Among people in paid work, those with a longstanding illness earn less. Median (middle) earnings for employees in poor health are 12 per cent below those of the healthy (£423 versus £479 per week, in part because they work fewer hours a week. Again, mental health problems are associated with worse outcomes still, with median earnings of just £369 per week: 23 per cent below those for employees without a longstanding health problem.

Working age people in poor health are therefore much more likely to be in poverty and they are especially likely to be in persistent poverty.

  • Those in poor health are 50 per cent more likely than healthy individuals to be in income poverty; they are 70 per cent more likely to be in “persistent” poverty (in poverty for three out of the last four years). This is partly due to the fact that those with a longstanding illness are more likely to spend long periods out of paid work.
  • 25-54 year olds with longstanding illnesses are almost twice as likely to be ‘materially deprived’ as those without. This means they are twice as likely to say they are unable to afford basic items such as being able to adequately heat their home or to keep up with their bills and debt payments. This reflects not just their lower incomes but the fact that they tend to be poor for longer and also that they may have higher needs because of their illness..
  • Individuals with mental illnesses are especially at risk of income poverty and material deprivation, particularly if they have an additional health problem. Overall, 33 per cent of those in poor health are materially deprived. But this rises to 40 per cent for those with a mental health problem (and no other conditions), and 56 per cent for those with a mental health problem and at least one other condition.

Tom Waters, a Research Economist at IFS and an author of the report said, “People with a longstanding illness are significantly less likely to be employed than those who are healthy. Only half of 25-54 year olds with a longstanding mental health problem are in work compared with nearly 90 per cent of the healthy population.  Those with a mental health problem who do work earn on average 23 per cent less per week than their healthy counterparts. As a result 40 per cent of people with mental health problems are in poverty, more than double rate for the healthy population. As these problems seems to be on the rise, this looks likely to become an increasingly important issue.”

Commenting on the findings, Helen Barnard, Head of Analysis at the Joseph Rowntree Foundation said: “It’s simply not right that working age people with a long-standing illness are about 50 per cent more likely to be trapped in poverty than healthy people. 

“It means people with a mental health condition are locked in a daily struggle to make ends meet, with 56 per cent reporting being unable to afford basic items or pay their bills. We know living in poverty can compound mental health problems and people in poverty are much more likely to experience anxiety and depression. 

“As a society that believes in justice and compassion, we have a duty to ensure that one misfortune doesn’t worsen another. Anyone can be pulled into poverty by poor physical or mental health. It’s vital that we loosen the grip of poverty on the nation by ensuring everyone can have the security of a home they can afford.” 

* Read Living standards, poverty and inequality in the UK: 2018 here

* Institute for Fiscal Studies https://www.ifs.org.uk/

* Joseph Rowntree Foundation https://www.jrf.org.uk/

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