Working families on low wages now one of biggest groups at risk of poverty

The under 25s and working families on low wages are the groups most at risk of poverty, according to a report by the Joseph Rowntree Foundation.

Its annual report Monitoring Poverty and Social Exclusion written by the New Policy Institute claims to be the most up-to-date and comprehensive guide to the state of poverty in Britain.

It shows a dramatic change in who is most at risk of poverty compared to 10 years ago.  It highlights:

– A big rise in the proportion of adults under 25 in poverty, and a big fall among the over 75s.
– More people in poverty living in working families – meaning as many are now in working families as workless ones.
– More people in poverty living in private rented housing – meaning as many are now in private as social rented accommodation.

The report says the labour market has changed significantly in the last 10 years with a vast increase in insecure work – zero hours contracts, part time work and low-paid self-employment. The report shows:

– Two thirds of people who moved from unemployment into work in the last year are paid below the Living Wage.
– Only a fifth of low paid employees have left low paid work completely 10 years later.
– The average self-employed person earns 13% less than they did five years ago.
– There are around 1.4m contracts not guaranteeing a minimum number of hours, and over half are in the lower-paying food, accommodation, retail and admin sectors.

The report also catalogues how incomes are lower on average than a decade ago with the worst off having seen the biggest falls. Their wages are nearly 10% lower than a decade ago. It states that average wages for men working full time (in real terms) have dropped from £13.90 to £12.90 per hour between 2008 and 2013. For women wages fell from £10.80 per hour to £10.30 in the same period. For the lowest paid quarter of men, hourly pay fell by 70p per hour; for women, 40p per hour.

The report highlights the way the housing market has had a negative impact on people in poverty, with more people in poverty living with insecure tenancies in the private rented sector. It says the number of private landlord repossessions is now higher than the number of mortgage repossessions. It adds that the end of a private rented sector tenancy is now the most common cause of homelessness. The number of Housing Benefit claimants has risen by over a million in the last 10 years, and despite an overall drop in the number of claimants in the last year, there was an increase in working people claiming Housing Benefit and the average amount they claim is rising.

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.”

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