‘Social failure at scale’ as millions living far below poverty line in UK

Six million of the poorest people in the UK would need to more than double their income to escape poverty, according to a new report which warns this is evidence of a “social failure at scale”.

A sustained fall in poverty has not been seen in two decades, the Joseph Rowntree Foundation (JRF) said, adding that the number people considered to be living in very deep poverty has risen in that period.

The charity said six million people were in very deep poverty – in households below 40% of the median income after housing costs – in 2021/22, which it said is 1.5 million more than 20 years ago.

Consumer champion Martin Lewis said the report must prompt policymakers and regulators to “sit up (and) take note”.

The well-known voice on money matters said: “I warned at the start of the energy crisis that I was out of tools to help many on the lowest incomes.

Stark reality

“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, it’s 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.”

JRF said its analysis, which looked at Government and Official National Statistics (ONS) data, showed that more than a fifth (22%) of people in the UK were living in poverty in 2021/22.

This means around 14.4 million people in total, including 8.1 million working-age adults, 4.2 million children and 2.1 million pensioners were living in households below 60% of the median income after housing costs.

Around two in every 10 adults are in poverty in the UK, with about three in every ten children in poverty, the organisation said.

Almost two-thirds (64%) of working-age adults in poverty live in working households, it added – a rise from 61% in 2020/21.

Overall some six million people lived in very deep poverty in 2021/22, having an average income 59% below the poverty line, it said.

Giving the example of a couple with two children aged under 14 who are living in poverty, the JRF said its analysis suggested the average income for this family type after housing costs was £21,900 and they would need an extra £6,200 per year just to reach the poverty line.

A family in that situation but living in very deep poverty had an average income after housing costs of £14,600 and would need around £12,800 on top of their existing income to reach the poverty line, JRF said.

Fiscal irresponsibility

Paul Kissack, JRF group chief executive, said: “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.”

The report repeated a call for a political parties to commit to a so-called essentials guarantee to be built into Universal Credit which would ensure people always have enough to cover “life’s essentials like food and energy”.

Mr Kissack said the political parties must set out their plans to “turn back the tide on poverty” as the country approaches a general election.

He said: “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”.

Hardship

Paul Carberry, chief executive of Action for Children, said the report showed that “millions are needlessly suffering the misery of hardship at huge financial and societal cost to us all” and called for “the ministerial will to make the right long term decisions” to help future generations escape poverty.

A Government spokesperson said: “We are continuing to support families with the cost of living backed by £104 billion – and there are 1.7 million fewer people living in absolute poverty, including 400,000 children, compared to 2010.

“Children are five times less likely to experience poverty living in a household where a parent works.

“Children are five times less likely to experience poverty living in a household where all adults work, compared to those in workless households.

“That’s why we are investing billions breaking down barriers to work and supporting over one million low-income earners through our In Work Progression offer – all while cutting taxes and curbing inflation so hard-working people have more money in their pocket.”