Hundreds of thousands of children and older people have been plunged into poverty in the past four years, according to a stark analysis laying bare the challenge to families trying to keep up with the cost of living in Britain.
The research from the Joseph Rowntree Foundation (JRF) found almost 400,000 more children and 300,000 more pensioners in the UK were living in poverty last year compared with 2012-13, the first sustained increases in child and pensioner poverty for 20 years. The foundation warned that decades of progress were at risk of being unravelled amid weak wage growth and rising inflation.
The thinktank urged the government to unfreeze benefits, increase training for adult workers and to embark on a more ambitious house-building programme to provide affordable homes for struggling families.
Frances O’Grady, general secretary of the TUC, seized on the report to call for the minimum wage to rise to £10 an hour and for the government to remove the cap on salaries in the public sector. “Working people are not getting a fair deal from the economy, with real wages still worth less than a decade ago,” she said.
The foundation’s latest research, titled UK Poverty 2017, found a gradual increase in poverty rates over the past four years, reversing a trend of falling numbers since the mid-1990s.
About a third of children were living in families lacking the resources for their minimum needs in 1994-95 before the rate fell to 27% in 2011-12 with the help of higher employment rates and tax credits introduced under the last Labour government. The proportion of pensioners living in poverty fell from 28% to 13% over the same period.
However, poverty rates increased to 16% for pensioners and 30% for children last year, while the charity also found as many as one in five people across the UK may be in poverty – which it defines as being when someone earns less than 60% of median earnings, adjusted for size and type of household.
The JRF chief executive, Campbell Robb, said: “These worrying figures suggest that we are at a turning point in our fight against poverty. Political choices, wage stagnation and economic uncertainty mean that hundreds of thousands more people are now struggling to make ends meet.”
Recent analysis from the Institute for Fiscal Studies estimates the number of children living in poverty is set to rise to a record 5.2 million over the next five years, up from about 4 million at present. The thinktank said frozen benefits as well as the introduction of universal credit would contribute to the surge, which it said would be most profoundly felt in the most deprived parts of the country.
Tax cuts and minimum wage increases have proved beneficial to some families – as the government has raised the personal tax-free allowance and imposed a “national living wage” of £7.50 an hour – but the JRF report found the gains were outweighed by the reductions from benefit support.
Philip Hammond, the chancellor, unveiled an additional £1.5bn for reforming the rollout of universal credit, helping to cut waiting times for claimants. However, the government still plans to cut working-age benefits by nearly £12bn over the next five years.
The JRF analysis also found evidence that some families were trapped in poverty despite being in work, and were unable to progress much further. It found a rate of one in eight workers, or 3.7 million people, do not earn enough for their needs and that 40% of working-age adults living in poverty have no qualifications, making it harder to earn better pay.
Rachael Orr, head of UK programmes at Oxfam, said it was “deeply concerning” to see more evidence that having a job was not enough to escape poverty. “It’s not just working adults who are affected, but their children too, and it’s a real worry to see progress on child poverty going into reverse,” she said.
Alison Garnham, chief executive of the Child Poverty Action Group, said: “As today’s report shows, we know how to reduce child poverty in the UK – we’ve done it before. Yet at the start of a sustained rise in the rate of child poverty – bewilderingly – there is inaction. The question the report begs is why are we not investing in our children?
“Families with children have had a decade of cuts to their incomes and the damage is showing. Unless there is action now to protect the living standards of low-income families, we will pile up problems for future generations and for the UK economy.”
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