A “perfect storm” of low employment and rising housing costs has pushed 29% of young adults in Britain into poverty, according to a new report.
Research from the New Policy Institute (NPI) found that poverty among young people has increased by 6 percentage points over the last decade – the biggest rise of any age group.
While a fifth of young adults are students and not working, this explains only ‘a small part of the changing poverty rate’, the report says.
Around two-thirds of the increase is due to lower employment rates among young adults.
Over the last decade the proportion of young adults in households where everyone works has fallen 11 percentage points to 44%.
There has also been a 3% increase in the share of 19-25 year olds in ‘workless’ households, and an 8% increase in families where not everyone works.
However, there has also been a sharp increase in the number of working households living in poverty, which the NPI says is a result of higher housing costs.
The report says some of the increase in the poverty rate is due to rising numbers of working age households living in the private rented sector.
During the last decade, poverty among working households in private rented accommodation increased from 21% to 27%, while there has been little change in other tenures. NPI says this is probably because earnings haven’t risen in line with housing costs, leaving workers with less money for rent and falling disposable income.
The number of young people living in private accommodation increased from 27% to 37% over the last decade.
A lack in affordable housing has had an adverse impact on young people, pushing more of them into poverty.
Commenting on the findings, the author of the report Hannah Aldridge said: “The last decade was the perfect storm for young adult poverty.
“Unemployment amongst young adults soared and even now it is still three times higher than for other adults.
“For those in work, a high and growing proportion live in the private rented sector where housing costs are higher.
“To reverse the rise in young adult poverty there needs to be an increase in young adult employment and more affordable tenancies.”