Social Justice

Report reveals record levels of in-work poverty in the UK

New study find 60 per cent of people in poverty are part of working families, as researchers point to problems coping with housing costs

Decades of political rhetoric about “scroungers” living on the dole means poverty is now synonymous with unemployment.

But more than half of people living in poverty in the UK – 60 per cent – live in a household where someone is working, according to a new report by Cardiff University researchers.

The study sheds new light on the growing problem of in-work poverty. The evidence shows that the likelihood of adults experiencing poverty while living in working households has risen by just over 25 per cent in the past decade.

Researchers at Cardiff’s School of Social Sciences say families with only a single earner are more likely to experience hardship.

Jeremy Corbyn has promised a Labour government would raise the minimum wage to £10 an hour to try to tackle low rates of pay, while the Conservatives plan to raise it to £8.75 by 2020.

But while low pay is part of the problem, it is not the sole factor, according to the new report. Rising housing costs are also part of the complex picture when it comes to in-work poverty.

“Our research finds that housing costs are becoming an increasingly important factor in determining poverty rates amongst working families,” said Dr Hick.

“If policy does not do more to tackle rising housing costs directly, then it seems likely that these will eat up gains made elsewhere – for example, in terms of the planned increases in the minimum wage.”

Tackling in-work poverty requires rethinking our approach

The study also found the tax credits set up by Gordon Brown when he was Chancellor under the previous Labour government had been “quite highly effective” in helping address in-work poverty.

The Cardiff University report recommends reversing cuts to tax credits; helping families with children to take up additional work by offering more affordable childcare; and tackling the high housing costs experienced by families, particularly in the private rented sector.

“Tackling in-work poverty requires rethinking our approach: it’s about improving the circumstances of the whole household, not just those of an individual worker, and promoting employment is key,” said Dr Hick.

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