Shocking research published today reveals a sharp rise in the number of under 25’s and working people living in poverty in the UK.
The latest poverty and social exclusion report, written by the New Policy Institute (NPI) in partnership with the Joseph Rowntree Foundation (JRF), shows how under 25’s and people in work are now more likely to be living in poverty than pensioners.
There are now around 13 million people living in poverty in the UK, with half of those coming from a working family and 1 in 5 are working age adults without children.
In stark contrast pensioner poverty has fallen to a record low under the coalition, according to the report. The decline in pensioner poverty is attributed to targeted government support aimed at protecting older people from the worst austerity cuts.
A changing labour market and the prevalence of zero-hours contracts, part-time work and low-paid self-employment means that moving into employment is no longer a guaranteed route out of poverty.
According to the report, there are around 1.4 million zero-hours jobs that do not guarantee a minimum number of hours. Over half of these are in retail, admin, accommodation or the food and restaurant sector.
Around two-thirds of unemployed people who moved into work over the last year are paid below the living wage. And only a fifth of people in low-paid jobs have escaped poverty wages completely within 10 years, according to the report.
Incomes are lower on average than they were a decade ago with the very poorest taking the biggest hit. For the lowest paid men, their hourly pay has fallen by a shocking 70p per hour, while women have seen their hourly rate fall by 40p per hour.
The prospects for self-employed people isn’t any better either, because analysis shows they earn 13% less than they did just 5 years ago.
Failure of the welfare system means Jobseeker’s Allowance (JSA) claimants on the government’s controversial Work Programme are more likely to be sanctioned, or have their benefits docked/cut, as they are to find a job through the back-to-work scheme. And 60,000 disabled people are having to wait 6 months or more for their sickness benefit claim to be fully processed.
The report also highlights a ‘welcome’ drop in the number of people classed as unemployed. However, Welfare Weekly recently reported that as many as 500,000 job seekers could be ‘disappearing’ from official unemployment figures, due to cruel and unjust benefit sanctions.
Children in receipt of free school meals fail to attain five ‘good’ GCSE’s, highlighting a lack of social mobility among children from poorer families.
The report also reveals more people living in poverty in private rented housing. There are now as many people living in poverty in the private sector as in social housing, according to the report. Private landlord repossessions are now more common than mortgage repossessions – 17,000 compared to 15,000 in 2013/14. Private landlord repossessions are the most common cause of homelessness in the UK, say JRF.
Julia Unwin, Chief Executive of JRF, said: “This year’s report shows a real change in UK society over a relatively short period of time. We are concerned that the economic recovery we face will still have so many people living in poverty. It is a risk, waste and cost we cannot afford: we will never reach our full economic potential with so many people struggling to make ends meet.
“A comprehensive strategy is needed to tackle poverty in the UK. It must tackle the root causes of poverty, such as low pay and the high cost of essentials. This research in particular demonstrates that affordable housing has to be part of the answer to tackling poverty: all main political parties need to focus now on providing more decent, affordable homes for people on low incomes.”
Tom MacInnes, Research Director at the NPI, said: “This report highlights some good news on employment – but earnings and incomes are still lower than five years ago, and most people who moved from unemployment into work can only find a low paid job. Government has focussed its efforts on welfare reform, but tackling poverty needs a wider scope, covering the job market, the costs and security of housing and the quality of services provided to people on low incomes.”
TUC General Secretary Frances O’Grady said: “This report highlights once again how ordinary working people are being excluded from the recovery and are becoming poorer in real terms.
“Our economy has become very good at creating low-paid, insecure jobs which are trapping more and more families in working poverty.
“The situation looks particularly bleak for young people – many of whom face decades of private renting and diminished career prospects.
“Without more affordable housing and quality employment opportunities, living standards for the many will continue their steep decline.”
A Government spokesman said: “The truth is, the percentage of people in the UK in relative poverty is at its lowest level since the mid-1980s and the number of households where no-one works is the lowest since records began.
“The Government’s long-term economic plan is working to deliver the fastest growing economy in the G7, putting more people into work than ever before, and reducing the deficit by more than a third.
“The only sustainable way to raise living standards is to keep working through the plan that is building a resilient economy and has enabled us to announce the first real terms increase in the minimum wage since the great recession.”
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