JRF: Unacceptable rises in child poverty as more working parents left unable to make ends meet

The assessment comes in a state of the nation report by the independent Joseph Rowntree Foundation (JRF), the leading authority on poverty in the UK. UK Poverty 2018 examines how poverty has changed over the last 20 years, providing the most comprehensive and up to date picture of the challenges and prospects facing low income families.

Overall, one in five of the UK population (22%) are in poverty - 14.3 million people. Of these, 8.2 million are working-age adults, 4.1 million are children and 1.9 million are pensioners. Eight million people live in poverty in families where at least one person is in work.

In-work poverty has been rising even faster than employment, with nearly all of the increase among working parents. There are now four million workers in poverty, around one in eight in the economy.

The rise is driven by:

1. Parents getting stuck in low-paid work with little progression, especially in jobs in hotels, bars, restaurants and shops.
2. Gains from the National Living Wage and tax cuts being outweighed by changes to tax credits and benefits that top up low wages.
3. The struggle to pay for housing: rising social rents, more low-income families with children living in the expensive private rented sector, and growing shortfalls in Housing Benefit are forcing parents to use other income to cover their rent, leaving with them less money to cover other essentials. 

To stem the rise in poverty, JRF is calling for reforms to social security, housing and the jobs market so more people build can build a better life. It recommends:

• Ending the freeze on benefits and tax credits a year early next spring to anchor people against low pay and high costs. As well as helping 200,000 people out of poverty, it would increase the incomes of nearly 14 million people on low incomes by an average of £270 in 2020/21.
• At the Comprehensive Spending Review, the Government invests in building at least 80,000 genuinely affordable homes a year.
• More employers play their part in solving poverty: by paying the real Living Wage and training their workforce so they can progress into higher-paid roles.

Campbell Robb, chief executive of the independent Joseph Rowntree Foundation (JRF), 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.”

Hazel Ratcliffe, a working lone parent from Fife, said: 

“Life can feel like a hamsters’ wheel: I am working and pushing myself so hard, but feel like I’m stuck. Every week I have school dinner money to give the boys, diesel for my car, food for the house. Most weeks I manage, but it involves rigid meal planning, then going around the supermarket with a calculator to ensure I stay within budget. Clothes, shoes and food are so expensive. 

“I live in private rented accommodation. Benefits should loosen the constraints of low pay and high rents. I think the government needs to increase benefits to match the rate of inflation. The minimum wage needs to be more like the living wage and make sure work is a route to a decent quality of life.”

Notes to Editors

The poverty indicator used throughout this report is when a family has an income of less than 60% of median income for their family type, after housing costs (AHC). The most recent poverty lines for four illustrative family types are provided below. It is important to note that these represent the total net income for each family type – earnings from employment, profit or loss from self-employment, state support (including benefits, tax credits and state pensions) and any other source of income. They are also after income tax, National Insurance and Council Tax payments, as well as contributions to occupational pension schemes, maintenance payments and student loan repayments. These income levels are measured after housing costs - rent (gross of housing benefit), water rates, community water charges and council water charges, mortgage interest payments, structural insurance premiums (for owner occupiers) and ground rent and service charges.

Family type £ per week, equivalised, 2016/17 prices

Source: Households Below Average Income 2016/17, table 2.2db https://www.gov.uk/government/statistics/households-below-average-income-199495-to-201617