More than half of UK adults and children living in poverty come from households where at least one person is in work, according to damning new figures from the Institute for Fiscal Studies (IFS).
IFS research found that 57% of people living in poverty in the UK today are children or working-age adults living in a household where someone is in paid work, up from 35% in 1994-95.
The latest figures rubbish Tory rhetoric that ‘work remains the best route out of poverty’.
In 1994-95 22% of children and 18% of all non-pensioners lived in households where no adult was in paid work, with most of these living in poverty. Record employment levels have seen this number fall to 13% and 12% respectively, but the proportion of working households living below the breadline has increased substantially.
IFS says one of the main drivers of in-work poverty is a lack of pay progression. They explain: “The wages of the low- and high- educated, and of men and women, end up much further apart by age 40 than they were at the start of their careers”.
The study also warned that upcoming benefit changes, such as the accelerated roll-out of Universal Credit, will significantly reduce the incomes of lower income households, including working households.
Ashwin Kumar, Chief Economist at the Joseph Rowntree Foundation, said: “The low pay economy is locking people in poverty.
“For too many people, work is not providing a route out of poverty: many families are struggling to make ends meet despite having a job.
“Our productivity slump means that average wages have barely grown since the recession, trapping more workers in poverty and leaving them unable to build a better life. This is not acceptable.
“If we want to solve the challenge of in-work poverty, we need to make sure our industrial strategy addresses productivity in hospitality and retail – industries in which many people are low-paid – not just high-tech firms.
“People in low-paid jobs need to get the support and training they need to make progress in work, and part-time workers need to have as much opportunity as full-time workers to progress, so that they can break free from the restrictions the low pay economy places on them.”
General Secretary of the TUC Frances O’Grady said “in-work poverty is soaring on this government’s watch”.
She added: “Working parents shouldn’t have to worry about feeding or clothing their kids. But after years of low pay and in-work benefit cuts, many are struggling to afford even the basics.
“Britain needs a pay rise. This means more employers paying the real Living Wage. And ministers scrapping the artificial pay restrictions on public sector workers.”
This article was last updated at 04:37 (GMT) on 7th March 2018 to correct a misleading headline.