More working households now live below poverty line

Report highlights changing demographic of those living below poverty line

More working households now live below poverty line

The proportion of adults under 25 in poverty has risen sharply, according to a report published by the Joseph Rowntree Foundation, which has revealed a dramatic change in who is most at risk of poverty in the UK compared to 10 years ago.

The TUC, commenting on the report’s findings, said that it highlighted how “ordinary working people are becoming poorer in real terms”.

The Monitoring Poverty and Social Exclusion report, written by the New Policy Institute (NPI), found that more people in poverty are working families. There are now more people in poverty living in private rented housing – meaning as many are now in private as social rented accommodation.

The report also highlights how the labour market has changed significantly in the last decade, seeing a vast increase in insecure work including zero hours contracts, part time work and low-paid self-employment. These conditions mean that getting a job does not necessarily mean getting out of poverty.

Two thirds of people who moved from unemployment into work in the last year are paid below the National Living Wage (£7.85 an hour for the UK and £9.15 inside London) – and the average self-employed person earns 13% less than they did five years ago, according to the report.  And the long term prospects for people in low paid work are not good either, as only a fifth of low paid employees have left low paid work completely 10 years later.

There has, however, been a vast reduction in pensioner poverty (which is now at the lowest on record) and the employment rate in the UK is close to its historic high

The situation is ‘bleak’
TUC General Secretary Frances O’Grady said: “This report highlights once again how ordinary working people are being excluded from the recovery and are becoming poorer in real terms.

“Our economy has become very good at creating low-paid, insecure jobs which are trapping more and more families in working poverty. The situation looks particularly bleak for young people – many of whom face decades of private renting and diminished career prospects.

“Without more affordable housing and quality employment opportunities, living standards for the many will continue their steep decline.”

Research published this month by the TUC shows the UK would need another 669,000 full-time employee jobs to return to its pre-recession labour market position.

Julia Unwin, Chief Executive of JRF, said: “We will never reach our full economic potential with so many people struggling to make ends meet.

“A comprehensive strategy is needed to tackle poverty in the UK. It must tackle the root causes of poverty, such as low pay and the high cost of essentials. This research in particular demonstrates that affordable housing has to be part of the answer to tackling poverty: all main political parties need to focus now on providing more decent, affordable homes for people on low incomes.”

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About Author

Shelly Ford

Shelly Ford, assistant editor at Every Investor, has worked as a writer within the banking and insurance sectors for ten years. She has a particular interest in personal finance and retail banking.