Hardship deepens as millions find the poverty line further out of reach - JRF report

Millions of people on the lowest incomes would need to double their income just to escape poverty. As it launches its flagship UK Poverty report, the Joseph Rowntree Foundation (JRF) is calling on those who want to govern the UK to tell voters what they will do to turn the tide on two decades of political failure which has left people in deepening poverty.

New analysis in the Joseph Rowntree Foundation (JRF) flagship UK Poverty report quantifies for the first time how many thousands of pounds are needed by families to escape poverty – and how that has got worse over time. It is now 20 years and 6 prime ministers since there was a sustained fall in poverty. 

How much you would need to move out of poverty

The poverty gap, or the amount of money needed to bring the incomes of people in poverty to the poverty line, has grown wider.  Six million of the poorest people – those living in very deep poverty – would need on average to more than double their income to move out of poverty.

Analysis of the latest data shows that the average person in poverty has an income 29% below the poverty line, with the gap up from 23% in the mid-1990s. The average income of people in very deep poverty – is 59% below the poverty line.

This is equivalent to a couple with two children under 14:

• in poverty needing an additional £6,200 per year to reach the poverty line.  In the mid 90’s, the gap was £3,300 after adjusting for inflation.
• in very deep poverty needing a whopping £12,800 more to reach the poverty line.

Poverty increased in the latest official data, returning close to pre-pandemic levels

• Over one in five people in the UK (22%) were in poverty in 2021/22
• This equates to 14.4 million people in total, with 8.1 million working-age adults, 4.2 million children and 2.1 million pensioners living in poverty
• Nearly two-thirds (64%) of working-age adults in poverty live in working households. This has increased by 3 percentage points, from 61% to 64%, between 2020/21 and 2021/22
• The number and proportion of children and pensioners in poverty rose between 2020/21 and 2021/22, as well as overall poverty
• Around two in every ten adults are in poverty in the UK, with about three in every ten children being in poverty
• Around 6 million people lived in very deep poverty in 2021/22

JRF analysis of broader trends since the 1970s shows that poverty rates grew rapidly under the Thatcher Government, reaching around a quarter in the mid to late 1990s, and have remained stubbornly high since then. Poverty fell during the first half of the New Labour administration but started to rise after 2005. Overall, poverty has barely moved since Conservative-led Governments took power in 2010, with every year’s poverty rate since then being between 20% and 22%.

At the same time, the British public is more conscious of rising poverty levels in society[1]. Since 2017, the majority agree that the government should increase tax and spending on health, education and other social benefits.

As we approach a general election, political parties must urgently address entrenched high levels of poverty by:

• Introducing an ‘Essentials Guarantee’ into Universal Credit, to ensure that everyone has a protected minimum amount of support to afford essentials like food and household bills.
• Beyond this, future governments must focus on expanding the foundations of economic security to everyone in our society. People experiencing poverty, especially deep poverty, will be looking for plans from parties to ensure that they are not left unprotected when times are hard.

Paul Kissack, Group Chief Executive of the Joseph Rowntree Foundation, says:
 “It has been almost twenty years and six Prime Ministers since the last prolonged period of falling poverty in the UK. Instead, over the last two decades, we have seen poverty deepen, with more and more families falling further and further below the poverty line.

“Little wonder that the visceral signs of hardship and destitution are all around us – from rocketing use of foodbanks to growing numbers of homeless families. This is social failure at scale. It is a story of both moral and fiscal irresponsibility – an affront to the dignity of those living in hardship, while driving up pressures on public services like the NHS. 

“It’s a story which can – and must – change.  Governments are not powerless to act, as we have seen throughout our history. One way politicians can take action in the next parliament is to enshrine in law a guarantee that people will always be able to afford the essentials, such as food and household bills, through our benefits system. 

“2024 will be a year of choices, and any political party wishing to form a new Government must set out a practical and ambitious plan to turn back the tide on poverty in the UK. That plan – to ensure the dignity and respect of every member of our society – will be essential for achieving any broader ambitions for the country”. 

Martin Lewis, Founder of MoneySavingExpert.com & The Money & Mental Health Policy Institute Charity said:

 “I warned at the start of the energy crisis that I was out of tools to help many on the lowest incomes.  Now we have hit the stark reality that 100,000s of people in the UK, even after they’ve had professional help from money charities, are still deficit budgeting – so their income is less than their minimum necessary expenditure. Definitions of poverty are tricky, especially when based on relative incomes, but that smells like a clear indication the problem is getting worse.”

“And let’s be plain, once people are in the deepest mire, it’s not a Money Saving Expert you need, its policy makers and regulators to sit up take note and address these deep rooted problems – which is exactly what I hope they do with this Joseph Rowntree Foundation report highlighting the situation and calling for change.”

Number of people in poverty and poverty rates for different groups, UK, 2021/22

Notes to Editors

1. Poverty rates rising to around pre-pandemic levels is largely due to incomes rising for middle income households as the UK came out of the pandemic, while temporary coronavirus-related support was withdrawn. The combination of falling average incomes and extra support [including] for those on the lowest incomes had seen poverty levels falling during the pandemic. The latest official data only captures the beginning of the cost-of-living crisis, with more timely data confirming the impact of rapidly rising prices on families. See JRF’s work tracking the impact of the cost of living on low income households https://www.jrf.org.uk/cost-of-living
2. People are considered to be in poverty if they live in a household whose equivalised after housing costs (AHC) income is less than 60% of median AHC income. People are considered to be in very deep poverty if this is less than 40% of median AHC income.
3. Poverty rates grew rapidly under Margaret Thatcher’s administration and remained high, with only small decreases in subsequent administrations.

Source: Institute for Fiscal Studies’ (2023) analysis of Family Expenditure Survey and Households Below Average Income Data

4. Poverty thresholds vary by family type

Source: Households Below Average Income, 2021/22.

All figures are after housing costs.

[1] According to the British Social Attitudes Study, the proportion of people who think there is quite a lot of real poverty in Britain has increased by nearly 20 percentage points since 2006