A hidden story of in-work poverty

In-work poverty is UK wide issue affecting 7.9 million UK citizens. Low pay, the private rental sector and unequal footing for disabled people are factors contributing to these very bleak and surprising numbers.

A full time job does not make you exempt from poverty; this is true for 3.8million working UK citizens.

7.9 million people in total are affected, and of those 2.9 million are children. To put things into perspective, in-work poverty accounts for 55% of all poverty within the UK. This is a truth that is neither fair nor acceptable. And worse yet is when we look at the numbers for London. The poverty rate is 27% – 6% above the national average, and more than half of the UK’s poverty sufferers reside in the capital city.

So what constitutes in-work poverty, and how is it defined? The answer is by household income. Meaning that if one person is working, and the income is below the threshold, the entire household is classed as sufferers of in-work poverty. If we talk about the poverty line in real figures we are talking £329 per week for a couple with two children, or £183 for a lone parent and their child, for example.

So how is this possible? Firstly, due to poor income. In the war against poverty, it’s been a hawk like focus on rising employment levels, which sounds good in theory, but may not be the most accurate measure for the UK government. The fact is that for people in low income, it has simply replaced it with in-work poverty. A report undertaken by the IFS bleakly summarised the nature of jobs market since the recession as “robust employment and weak earnings.”

The impact of this is grave and it is families that have to deal with the affects. Take the National Living Wage for example. Even with the recent (over 25) rise to £7.50 per hour, assuming a 38 hour week, a full time worker can only expect up to £14,800 a year. This leads to a culture of sacrifice, and individuals are often not able to afford real needs or anything above that for their family. These sacrifices are leading to more children living in poverty. It’s also created a rising number of full time workers carrying the emotional burden of living in poverty and in particular a low sense of self-esteem.

The impact of this is grave and it is families that have to deal with the effects. Take the National Living Wage for example. Even with the recent (over 25) rise to £7.50 per hour, assuming a 38 hour week, a full time worker can only expect up to £14,800 a year.

Housing is another area pushing people further into in-work poverty, especially in the rental market. In the UK the average monthly rent has now risen to £750 per month. A 2016 report by Joseph Rowntree Foundation (JRF) on in-work poverty for people in the private rented sector supported this argument, citing that the numbers living in poverty in the UK had doubled to 4.5 million in a decade.

For low earners, the potential to move out of the private renting sector doesn’t look great. If we look at London specifically, the reality of buying a property just gets further and further away. Without incorporating inflation, the average house price in London has grown by 68% in the last six years. For those hoping to put a portion of their salary aside to save for that possibility, rents in London have gone up by 23%(ONS).

The current system is not working for low-income families, and forcing them into in-work poverty. A huge percentage of people, 73% to be exact, who privately rent and are in the bottom fifth of income distribution in the UK, pay more than one third of their income on rent. To add to this, the security in the rental sector is lowering – in the last 5 years only, the number of evictions in the UK have increased from 23,000 to 37,000.

Another dimension of the struggles faced by low-income families is disability; the JRF report also took into account the higher outgoings faced by those with disabilities. Uncovering more stark figures, they revealed that half of people living in poverty are either themselves disabled or are living with a disabled person in their household. When you consider that there are over 11 million people in UK living with a long-term illness, impairment or disability – this is a sector that simply cannot be omitted from discussion.

If we look at employment as a way out for this group, the statistics have improved but are still marked with inequality. There is a 30.1 percentage point gap between non-disabled and disabled people in work in the UK, which represents over 2 million people. Adding equal qualifications into the mix still shows disparity. In an NPI comparison report, disabled people with a level 3 qualification were almost three times as likely to be lacking but wanting work when compared to a non-disabled person with the same level of qualification. So it’s clear that the government must work harder to close this gap in order to address in-work poverty across the board.

The numbers may in many ways be bleak but there are clear focus points to turn this around. Low wages and support for low-income families, alleviating pressure enforced by the private rental market, then employment and support of disabled individuals within low-income families. My hope? That in our Brexit negotiations we keep in-work poverty sufferers in mind, giving them a chance to lift themselves above the poverty line and have the possibility of a better future.

Join me in the discussion at @Eugene_ayisi

Further reading…


Leave a Reply