Poorest UK households worse off last year, according to new report

The Resolution Foundation also claims that the government has underestimated the rise in child poverty

Britain’s poorest 30 per cent of households were worse off last year despite record employment levels, according to a new report.

Research from the Resolution Foundation (RF) also indicates that child poverty has been rising twice as fast since 2010 as official government figures suggest

The think tank’s annual Living Standards Audit, published today (July 24), describes a “generalised stagnation” in household income in 2017-18, with strong employment and an increased minimum wage offset by higher inflation and low overall wage growth.

The lowest 30 per cent of households found their incomes going backwards by between £50 and £150.

In 2003, households on the lower half of incomes typically earned £14,900. In 2016/17 that figure had fallen to £14,800, according to the new research. Both figures are adjusted for inflation and housing costs.

The RF found that surveys revealed that over 40 per cent of low-to-middle income families feel they would be unable to save £10 a month and over 35 per cent would be unable to afford a holiday for one week with their children.

“We appear to have a picture of generalised stagnation for many, with lower income households actually going backwards,” the audit said.

“The apparent falling away of the bottom from the middle in 2017/18 represents a disturbing new development.

“There are good odds that 2017/18 delivered a notable increase [in poverty].

“Relative child poverty may have risen to its highest rate in at least 15 years, despite high levels of employment.”

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Child poverty, which is calculated by the number of under-16s living in a household that earns less than 60 per cent of the average income, may have grown by 21 per cent between 2011 and 2016, rather than 11 per cent, in part because the growth is from a lower base.

The RF’s senior economic analyst Adam Corlett said: “Reducing child poverty has been a goal of politicians from all parties in recent decades. But our analysis shows that child poverty is likely to have risen last year, and that rises since 2010 have been underestimated in official government data.”