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Friday, 23 February

In Work Poverty on the Rise

One in every eight workers in the UK - 3.8 million people - is now living in poverty. A total of 7.4 million people, including 2.6 million children, are in poverty despite being in a working family. This means that a record high of 55 per cent of people in poverty are in working households.

Monitoring Poverty and Social Exclusion 2016, an annual state of the nation report written for the independent Joseph Rowntree Foundation by the New Policy Institute, has found that 13.5 million people, 21% of the UK’s population, are living in poverty.

The economic recovery has helped to stop poverty rates from rising higher, with overall poverty levels remaining flat compared to 2010. But the new report finds that there is growing insecurity underneath positive economic headlines. Since 2010/11, when the economic recovery began, in-work poverty has increased by 1.1 million people.

The rise is being driven by the UK’s housing crisis, particularly high costs and insecurity in the private rented sector (PRS). The report finds that:

  • The number of people in living in poverty in the PRS has doubled in a decade, from 2.2 million people in 2004/5 to 4.5 million people today.

  • Almost three quarters (73%) of people in the bottom fifth of the income distribution and living in the PRS pay more than a third of their income in rent. This is compared to 28% of owner occupiers and 50% of social renters with similar income levels.

  • Half of children living in rented homes (46% in the PRS and 52% in the social rented sector) live in poverty.

  • There are 3.8 million workers living in poverty in the UK today, one million more than a decade ago. This is equivalent to 12% of all workers in 2014-15.

  • Once account is taken of the higher costs faced by those who are disabled, half of people living in poverty are either themselves disabled or are living with a disabled person in their household.

  • Insecurity for renters has risen since 2010, with the number of evictions by a landlord rising from 23,000 in 2010/11 to 37,000 in 2015/16. Over the same period, mortgage repossessions have fallen from 23,000 to 3,300.

The report highlights the difference in poverty levels across different regions of the UK. More than half of people in poverty in England live in London and southern England (the East, the South East and the South West), and the capital has the highest poverty rate at 27%, 6% above the UK average.

Helen Barnard, Head of Analysis at the Joseph Rowntree Foundation, said: “The UK economy is not working for low-income families. The economy has been growing since 2010 but during this time high rents, low wages and cuts to working-age benefits mean that many families, including working households, have actually seen their risk of poverty grow."

Picture: With thanks to the Goodman Theatre

Article written by Brian Shillibeer

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