photo credit: Ed Yourdon via photopin cc

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300,000 more people could be living in “absolute poverty” in the UK than previously thought, according to a shocking new report.

Research from the Institute for Fiscal Studies (IFS) found that poorer households have experienced larger increases in living costs than richer households, mainly due to rises in food and energy prices.

IFS say that taking into account “differential inflation” since 2010-11, the number of people recorded as being in absolute poverty would be 300,000 higher in 2013-14 than official figures suggest.

Between 2002-03 and 2013-14 the poorest 20% of households saw prices increase on the typical goods they purchase by 50%, compared to richest 20% who saw prices rise by 43%.

According to the IFS, poorer households devote more of their income on things like food and energy, whereas the richest 20% of British society spend more on areas such as motoring and mortgages.

On average, the prices of goods purchased by low-income households have risen more quickly than those more commonly purchased by more affluent households. This is particularly apparent in the ‘wake’ of the 2008 recession, say IFS.

Source: IFS Poverty Study
Source: IFS Poverty Study

The government uses two different methods of measuring poverty in the UK. The first is ‘absolute poverty’, which is a measure of the number of people thought of as being below a poverty line, before housing costs, calculated using the Retail Price Index (RPI). Through this measure we can confidently say that 18.8% of individuals were living in absolute poverty in 2012-13, before housing costs.

Another method used by the government is ‘relative poverty, which calculates the number of households earning less that 60% of the national median average. Using this method we can calculate that 15.4% of the UK population were living in ‘relative poverty’ (before housing costs) in 2012-13.

The IFS study also accounts for different inflation pressures felt by households depending on how they spend their income – a measurement not included in official poverty statistics. This new measurement found that absolute poverty is 0.5% higher in 2013/14 than standard poverty measures- the equivalent of 300,000 more households.

However, the IFS say this trend has not been consistent over earlier years, adding that “this new definition had been at times higher and at times lower”.

Peter Levell, a Research Economist at IFS said: “In recent years, lower-income households have tended to see bigger increases in their cost of living than have better off households.

“Official poverty measures do not take this into account and hence have arguably understated recent increases in absolute poverty by a small but not insignificant margin.”

Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary, said:

“This report is further evidence of the huge pressures which families are facing as a result of David Cameron’s cost-of-living crisis.

“The Government’s failure to tackle soaring energy, childcare bills and low wages has led to millions struggling to get by. Earlier in the year the IFS said child poverty is set to rise 900,000 by 2020.

“A Labour Government will do more to help families who are struggling to make ends meet so that every child gets the best start in life. We will freeze energy prices, raise the minimum wage, extend free childcare provision, scrap the Bedroom Tax and introduce a Compulsory Jobs Guarantee to get people off benefits and into work.”

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Photo credit: Ed Yourdon via photopin cc

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4 COMMENTS

  1. Well, it was either…

    *Prosecute the bankers for the toxic mortgage/LIBOR scams that impoverished the world, making homeless, hungry, beggars out of all of us.
    *Punish the banking cartel’s multi-billion dollar drug-money laundering operations.
    *Investigate why jobs and manufacturing are being out-sourced to China. How China came to own the most of the US debt that financed the US war against…China. Why China (the oligarchy) is buying up US assets at fire sale prices, even as the US is threatening war against China (national security).
    *Stop the Fed from fanning hyper-inflation (QE1, QE2, QE3, QE∞) that will result in food riots, mass starvation.
    *Stop the looting, privatization of the world’s social safety net, public space, the commons, imposed “austerity” due to the unprosecuted toxic mortgage/LIBOR/Social Security rip-off scams.
    *Investigate who was really behind 9/11, London 7/7, the false-flag terrorist attack that touched off the serial, never-ending wars of pillage against the nation-states of the world, initiating the massive expropriation of public wealth, while simultaneously creating the pretext for the massive police state edifice now threatening the freedoms of everyone.
    *Investigate why the US government won’t move heaven and earth to stop the radiation spewing from Fukushima, poisoning the US, the northern hemisphere, and investigate the connections between the Fukushima, Stuxnet, HAARP and nuke created earthquakes.

    OR…

    The Satanic Oligarchy…

    *Advocates suicide for the useless eaters; and that people work for free.
    *Makes being homeless, jobless, veteran, elderly and hungry a crime (useless eaters).
    *Ends food stamps to the poor even though there are no jobs, no social safety net, which will result in the starvation of thousands of Americans; with one in five children now living in poverty, forcing the old back to work, while the young can find no jobs.
    *Stands by while the unprosecuted banking and economic crisis destroys the ability of cities and towns to protect their own citizens, fund their police departments.
    *enables the invasion of Mexican drug cartels, allowing the cartels to traffic drugs into the US, while supplying arms via “Fast & Furious” and allowing a massive influx of illegal aliens into the US.
    *Confiscates the guns.
    *DHS buys billions of anti-personnel bullets, while giving away “tanks” to US cities and towns.
    *Flies soon to be weaponized drones over everywhere.
    *Allows Israel, a foreign country to run US NSA spying out of Mormon (Freemason/occult) Utah.
    *Pre-positions military hardware in preparation for the coming US melt-down and chaos (COG).
    *Buys thousands of “FEMA coffins” in anticipation of US mass starvation, Fukushima FEMA camp relocations.

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