Poverty in the United Kingdom

This article is about poverty within the population of the United Kingdom as distinct from UK policy on world poverty.

Despite being a developed country, those living at the lower end of the income distribution in the United Kingdom have a relatively low standard of living. Data based on incomes published in 2016 by Department for Work and Pensions (DWP) show that, after housing costs have been taken into consideration, the number of people living in the UK in relative poverty to be 13.44m (21% of the population) In 2015, a report by Institute for Fiscal Studies reported that 21.6% of Britons were now in relative poverty. The report showed that there had been a fall in poverty in the first few years of the twenty-first century, but the rate of poverty had remained broadly flat since 2004/5.

It has been found by the Poverty and Social Exclusion project at Bristol University in 2014, that the proportion of households lacking three items or activities deemed necessary for life in the UK at that time (as defined by a survey of the wider population) has increased from 14% in 1983 to 33% in 2012.

History

Poverty in the postwar era

In the early 1950s, it was believed by numerous people that poverty had been all but abolished from Britain, with only a few isolated pockets of deprivation still remaining. Much of this assumption was derived from a study of poverty in York carried out in 1951 by Seebohm Rowntree and his colleague G. R. Lavers, which showed that in 1950 only 1.5% of the survey population lived in poverty, compared with 18% in 1936 when a previous study had been conducted in that town by Rowntree. Rowntree and Laver cited full employment policies, rises in real wages and the expansion of social welfare programmes as the key factors behind this positive development. They could also show that, while 60% of poverty in 1936 was caused by low wages or unemployment, the corresponding figure in 1950 was only 1%. A leader in The Times spoke positively of this ‘remarkable improvement – no less than the virtual abolition of the sheerest want.’

Over the course of the 1950s and 1960s, however, a "rediscovery" of poverty took place, with various surveys showing that a substantial proportion of Britons were impoverished, with between 4% and 12% of the population estimated to be living below the Supplementary Benefits’ scales. In 1969, Professor A. Atkinson stated that

"it seems fair to conclude that the proportion of the population with incomes below the National Assistance/Supplementary Benefits scale lies towards the upper end of the 4-9 per cent."

According to this definition, between 2-5 million Britons were trapped in poverty. In addition, some 2.6 million people were in receipt of Supplementary Benefits and therefore living on the poverty line. This meant that at least 10% of the population were in poverty at his time.

Bad housing conditions also constituted a major cause of poverty in the postwar era. In the early Sixties, it was estimated that three million families lived in "slums, near slums on grossly overcrowded conditions," while a 1967 housing survey of England and Wales found that 11.7% of all dwellings were unfit.

In their 1965 study on poverty, "The Poor and the Poorest," Professors Peter Townsend and Brian Abel-Smith decided on measuring poverty on the basis of the National Assistance levels of living; specifically, how many people were living below it. Using this poverty line, Townsend and Abel-Smith estimated that some 14% (around 7.5 million) of Britons lived in poverty, i.e. living on incomes that were below the level of National Assistance. Townsend and Abel-Smith also estimated that since the mid-1950s the percentage of the population living in poverty had risen from 8% to 14%. In their study on poverty, Townsend and Abel-Smith found that 29% of all persons living in poverty in 1960 were below the age of 15, comprising 17% of all children. About half were living in households whose heads were retired, and one-third were living in households whose head was in full-time work.

The continued existence of poverty in the 1960s was also characterised by differences in health between different social classes. In 1964-65 the incidence of infant deaths was more than half as much higher in the two lowest social classes than in the two highest social classes (38.0 per 1000 compared with 24.5 per 1000). In 1961-62 28% of all men recorded at least one spell of sickness of four days or more. For the lowest social classes, however, 35% of men had experienced this, compared with 18% of men in the highest social classes. Men in the lowest social class were found to be more prone to bronchitis and have worse and fewer teeth than those in higher social classes. In addition, the incidence of mental illnesses was higher in lower social groups, while unskilled workers in retirement were more likely to be severely disabled. In addition, children from poor backgrounds (who had lower nutritional standards than children from richer backgrounds, while a high proportion were short for their age) were found to have higher morbidity rates when they grew up. On a positive note, patients from social classes IV and V did consult their doctors on a more frequent basis than those in the higher social classes. As noted in another poverty study, there was evidence that in large families the height of children was less than that for the average, while families with three or more children were more likely to be inadequately nourished. In Sheffield, it was found that a 5-year-old boy in a good district was an inch taller and 1.5 lb heavier, and a 14-year-old boy more than an inch taller and 6lb heavier than equivalent children in poor districts. In a cohort study of children born in one week of 1946, J.W.B. Douglas estimated stated that mothers in families of semi-skilled and unskilled workers "are frequently in a low state of health owing to an inadequate diet, lack of resources, and the cycle of child-bearing."

In his work "Poverty in the UK" (published in 1979), Townsend suggested that 15 million people lived in or on the margins of poverty. He also argued that to get a proper measure of relative deprivation, there was a need to take into account other factors apart from income measures such as peoples’ environment, employment, and housing standards.

According to one study, 365,000 families in Britain (excluding Northern Ireland) in 1966 were in poverty by an old assistance standard, and 450,000 families by a new standard. In another study on poverty, Wilfred Beckerman estimated that 9.9% of the British population lived below a standardised poverty line in 1973, compared with 6.1% of the population of Belgium (he also found that social security measures in Belgium had been more effective at reducing poverty than those in Britain).

Low pay was also a major cause of poverty, with a report by the TUC in 1968 finding that about 5 million females and about 2.5 million males earned less than £15 a week. According to one study, around 20% to 23% of employees in the late 1960s had low hourly wages. In 1974, a quarter of adult employees in Britain earned less than £27 a week or less before tax, only slightly above the officially defined poverty line for an average family. Regional differences in pay also remained pronounced during the post-war period. If the figure for the United Kingdom was 100 in 1973, then the figure for the West Midlands was 105, the South-East 105, East Anglia 92, and Northern Ireland 87. As noted by one researcher, for Wales there existed "considerable regional disparities within Wales and a basic division between the high-wage area of the industrial south and the low-wage areas of central, northern and west Wales."

Slum housing also remained a problem, with 12% of British households living in houses or flats considered to be unfit for human habitation in 1972. In 1975, government statistics estimated that 1,800,000 children lived in poverty.

Nevertheless, the number of people estimated to be living in poor housing conditions was lower at the start of the 1970s than at the start of the 1960s. In 1961, 4,700,000 households lived in unfit or substandard homes, compared with 2,846,000 in 1971.

During the late 1960s and 1970s, progress was made in reducing the level of post-war poverty and inequality. Using a constant relative poverty line set by the Council of Europe (those living on below half the average income), 3 million families in Britain lived in poverty in 1977, compared with 5 million in 1961. According to one measurement, the 1971 Supplementary Benefits scale, the percentage of individuals living in poverty fell from 9.4% in 1963 to 2.3% in 1973. Low pay continued to remain a major problem by the end of the 1970s, however, particularly amongst manual workers.

Based on various measurements, however, the number of Britons living in poverty rose significantly from 1979 to 1985. The number of Britons living in poverty (when defined as living below the Supplementary Benefit level) rose from 2,090,000 to 2,420,000 during that period, while the number of people living in poverty when defined as living on or below the Supplementary Benefit level rose from 6,070,000 to 9,380,000. Using a poverty measurement of living at 140% of the Supplementary Benefit level or below, the rise was alarmingly higher, from 11,570,000 to 15,420,000.

Figures from the European Commission estimated that from 1975 to 1985 the number of people living in poverty had doubled in Britain, from just over 3 million to 6.5 million. In 1975, the United Kingdom had fewer people living in poverty than Germany, Italy, Belgium, and Luxembourg. By 1989, Britain had a higher poverty than each of these four countries. In 1989, 12% of the UK population was estimated to be living in poverty, compared with 11.7% in Italy, 8.5% in Germany, 7.9% in Luxembourg, 7.4% in the Netherlands, and 7.2% in Belgium.

From 1979 to 1987, the number of Britons living in poverty (defined as living on less than half the national average income) doubled, from roughly 10% to 20% of the whole population. In 1989, almost 6 million full-time workers, representing 37% of the total full-time workforce, earned less than the "decency threshold" defined by the Council of Europe as 68% of average full-time earnings. In 1994, 76.7% of all part-time workers earned less than this threshold. A 2000 report by the Joseph Rowntree Foundation estimated that 4 million people lacked access to a healthy diet, while a review of EU food and health policies estimated that food poverty was far higher in the UK than any other EU member state.

From the late 1990s onwards, however, poverty began to fall steadily, helped by policies such as big increases in national insurance benefits and the introduction of the national minimum wage. Using the 60% of median income after housing costs poverty line, the percentage of the British population living in poverty rose to 25.3% in 1996/97, compared with 13.7% in 1979.

From 1997/98 to 2004/05 (using the same 60% of median income after housing costs measurement), the percentage of the population living in poverty fell from 24.4% to 20.5%.

Poverty in the UK in the 21st century

Absolute poverty rates (After Housing Costs) in the UK, 1997-2014. Figures are for Great Britain until 2001–02 and for the whole of the UK (ie including Northern Ireland) from 2002–03 onwards. The absolute poverty line is defined as 60% of median income in 2010–11.

Rates of poverty fell just before the turn of the century and continued to do so until 2004-5. Since then rates of poverty have remained stable, with some year on year fluctuations caused by the financial crisis that started in 2008. The Institute of Fiscal Studies has counted the number of people in Absolute Poverty as falling from c.37% in 1996/7 (21.8m people) to c.22% in 2004/5 (13.2m), a figure that remained the same in 2014/5 (14.1m taking population growth in account).

The trend for Relative Poverty is the same (a fall in the number of poor from 1997/8 until 2004/5 and a relatively stable amount since then) , although the earlier numbers are lower.

Eurostat figures show that the numbers of Britons at risk of poverty has fallen to 15.9% in 2014, down from 17.1% in 2010 and 19% in 2005 (after social transfers were taken into account).

Reactions to Poverty

The Office for National Statistics has estimated that in 2011, 14 million people were at risk of poverty or social exclusion, and that one person in 20 (5.1%) was now experiencing "severe material depression." Poverty among young people increased by 3.9% from 2007 to 2010. In assessing social inequality in Britain, Danny Dorling has noted that "people in different parts of Britain and people living within different quarters of its cities are living in different worlds with different norms and expectations. This was not the case a few decades ago. This is not the case to the same extent in the majority of affluent nations in the world."

A new term is appearing, 'Just About Managing' or 'JAM'. This applies to people who can put food on the table and pay rent or mortgage at least part of the time but have problems if their income falls or if there are unexpected bills. JAM's are typically families where at least one person works. JAM's may suffer social exclusion being unable to afford holidays or evenings out.

The Resolution Foundation claims that the incomes of the poorest 10% in the UK will fall by 3% in real terms by 2020 due to government policies on tax and welfare. The lowest third of incomes will suffer falls in income over the coming years. Incomes will fall because many welfare benefits that poorer people receive have been frozen in cash terms and with inflation cash will be worth steadily less.

Relative poverty rates (After Housing Costs) in the UK, 1996-2014 Figures are presented for GB up until 2001–02 and for the whole of the UK from 2002–03 onwards. The relative poverty line is defined as 60% of the median income in each year

The Institute for Fiscal Studies reported the numbers of poor United Kingdom children in wage-earning families increased from 2009 to 2014 and more poor children currently live in working families than live in families on benefits. The IFS reported "Recent falls in inequality are likely to prove temporary. Stronger earnings growth and the Conservatives’ planned income tax cuts would do most for incomes towards the top of the distribution, while planned benefit cuts will hit low-income households [both in and out of work] hardest." Anne Longfield, Children's Commissioner for England wrote "The majority of children living in poverty have at least one parent who is working. Employment is important but if wages do not rise substantially in relation to living costs it will not provide a route out of poverty alone. The Joseph Rowntree Foundation has today published a report stating that families with children working full-time on the National Minimum Wage are now 15% short of the Minimum Income Standard that people believe offers an acceptable standard of living. Today's announcement will effectively confine to history any figures on the millions of children being raised in families who experience in-work poverty denying them necessities such as adequate food, clothing and heating."

Julia Unwin of the Joseph Rowntree Foundation said "A strong economy and rising employment have masked the growing problem of in-work poverty, as years of below-inflation wage rises have taken their toll on people's incomes. The upcoming minimum wage rise will help, but many low-income working families will still find themselves worse off due to tax-credit changes. Boosting productivity and creating more jobs which offer progression at work is vital to make work a reliable route out of poverty."

Campbell Robb of Shelter said "It's heart-breaking to think that so many people are having to make a choice between paying the rent and putting food on the table, or living in fear that any drop in income would leave them unable to cover their housing costs. The sad truth is that far too many people in Britain right now are living in homes that just aren't up to scratch - from the thousands of families forced to cope with poor conditions, to a generation of renters forking out most of their income on housing each month and unable to save for the future."

As of 2015 there is actual hunger in the United Kingdom and significant numbers of UK citizens are driven to use food banks. There is also significant malnutrition. Poorer people are frequently forced to buy and eat cheaper, less healthy food. The BMJ, a UK peer-reviewed medical journal published:

For the poorest in our society, up to 35% of disposable income will now be needed for food, compared to less than 9% for the more wealthy. This will increase reliance on cheap, highly processed, high fat, high sugar, high salt, and calorie-dense, unhealthy foods. 2 Re-emerging problems of poor public health nutrition such as rickets and malnutrition in the elderly are also causes for concern. (John D Middleton Vice president John R Ashton, Simon Capewell Faculty of Public Health)

In 2016, 10% of UK households live in fuel poverty. Fuel poverty is calculated by gauging if a household's income would fall below the official poverty line after spending the actual amount needed to heat the home. The average fuel poverty gap of these households – that is, the amount needed to escape fuel poverty – is £371 a year, the latest figures indicate, with those in privately rented properties hit hardest.

In a recent report commissioned by the Joseph Rowntree Foundation poverty and participation are analyzed as a social phenomenon characterizing UK society following the tradition initiated several decades ago by Peter Townsend. Participation in society is measured in terms of social relationships, membership of organisations, trust in other people, ownership of possessions and purchase of services. The study finds out that all these dimensions of participation are lower among people with low incomes. While participation generally drops as income declines, participation stops falling among the 30 per cent or so of people with the lowest incomes, creating a participation 'floor'. The 30 per cent of people with the lowest incomes are forced to choose between the basic necessities of modern life; they must decide which needs to neglect. For people affected by the floor, additional income may well be spent on upgrading the quality of necessary goods and services rather than adding to them. Averages mask important variation. The participation floor for benefit recipients is lower than for other groups on the same income. Most minority ethnic groups experience greater material deprivation than the white majority but social participation is, on average, higher. Children's engagement in school life and friends is not directly affected by household income. However, parents on low incomes, on average, play less often with their children and spend less on activities. This is associated with poorer educational outcomes as judged by teachers. Low-income parents frequently spend more time than affluent ones assisting children with their school work because they have fallen behind their classmates.

The persistence of high poverty rates in the UK is associated with the relatively low generosity of the welfare state. The UK social security system is characterised by a residual welfare state model based on the notion of market dominance and private provision. The state only intervenes to moderate extreme poverty and provide for basic needs, largely on a means-tested basis (Esping-Andersen 1990; Ferragina and Seleeib-Kaiser 2011).

Wales

Poverty within the UK is particularly concentrated in the country of Wales. While the relative income-poverty rate for the UK stood at 16.8% in 2014, the same poverty rate for Wales stood at 23% in the same year. Poverty in Wales has remained in the 25% range, with only small dips throughout the last decade. While the trends correlate with overall reductions in less impoverished areas of the UK, it does not correlate with Scotland, who in the 1990s, had a relative similar poverty trend as Wales. Conservative attitudes began to grow during the reign of the Labour party in the 2000s, culminating in an overall negative opinion towards public spending increases beginning in the 2010s. This negative trend created a lack of support for Welsh poverty reduction efforts, and can explain much of the stagnation present in the rate. The lack of attention to Wales has led to a consistent issue in Welsh politics being that of poverty, with efforts to primarily reduce the prevalence of childhood and Fuel Poverty a priority.

London

Data published in 2014 by New Policy Institute and Trust for London found in the three years to 2012/13, 2.2 million people were in poverty in London after housing costs. This figure represents 28% of London's population, 8 percentage points higher than the rest of England.

How poverty in the United Kingdom is defined and measured

Historical statistics on poverty

The table below shows the percentage of the population in poverty derived by three different measures: relative poverty (earning less than 60% of the median), the National Assistance scale and the Supplementary Benefits scale. Estimates from the National Institute of Economic and Social Research.

Percentage of population in poverty

	Relative poverty		National assistance scale		Supplementary benefits scale
Year	Households	Individuals	Households	Individuals	Households	Individuals
1953/54	6.5%	4.8%	6.5%	4.8%	22.5%	21.0%
1963	6.8%	5.5%	2.5%	1.4%	10.5%	9.4%
1967	5.8%	5.3%	0.9%	0.9%	6.0%	5.5%
1971	4.9%	4.2%	0.5%	0.5%	4.9%	4.2%
1973	4.3%	3.0%	0.3%	0.2%	3.5%	2.3%

Estimates of poverty in the United Kingdom from 1950-1975 (percentage of population)

1953-54: 1.2% (Abel-Smith and Townsend, FES) Unit: Household

1954: 12.3% (Gough and Stark, IR) Unit: Tax unit

1959: 8.8% (Gough and Stark, IR) Unit: Tax unit

1960: 3.8% (Abel-Smith and Townsend, FES) Unit: Household

1963: 9.4% (Gough and Stark, IR) Unit: Tax unit

1967: 3.5% (Atkinson, FES) Unit: Household

1969: 3.4% (Atkinson, FES) Unit: Household

1968-69: 6.4% (Townsend, Survey) Unit: Household

1971: 4.9% (Fiegehen et al., FES) Unit: Household

1975: 11.3% (Berthoud and Brown, GHS) Unit: Household

Poverty as 60 percent of median income

The most common measure for poverty, as used in the Child Poverty Act 2010, is ‘household income below 60 percent of median income’. The median is such an income that exactly a half of households earn more than that and the other half earns less.

Income distribution (Before Housing Costs) for the UK total population (2014/15). In 2014/5, the median income in the UK was £473 per week (£24,596 a year). Those earning 60% of this figure (£284 a week / £14,758 a year) were considered to be in the low income bracket.

In 2014/5, the median income in the UK was £473 per week (£24,596 a year). Those earning 60% of this figure (£284 a week / £14,758 a year) were considered to be in the low income bracket.

This is the definition that is used by the UK Government's Department of Work and Pensions in its yearly survey Households below average income. However, their reports expressly avoid using the word poverty, using low income instead. Reports from others agencies, such as the Institute of Fiscal Studies Living Standards, Poverty and Inequality in the UK, use the same methodology, but specifically use the word poverty.

This measure can be further divided.

Those who live in Absolute Poverty have a ‘household income below 60 percent of median income' as compared to a rate fixed in 2010/11 and that only changes in in line with inflation.

Those who live in Relative Poverty have a ‘household income below 60 percent of median income' as compared to all other incomes in the same year.

Absolute Poverty is better at judging poverty in the short term, whereas Relative Poverty is better at seeing long-term trends. This is because general concepts of poverty change with time, and Relative Poverty reflects this better.

Reports on poverty also tend to take housing costs in to account, distinguishing between Before Housing Costs (BHC, where housing costs such as rent and mortgage interest payments have not been deducted) and After Housing Costs (AHC). Different social groups in the UK tend to have vastly different costs for housing, affecting available income.

Relative Poverty was used before its formal adoption now. In the early 1980s, Tony Byrne and Colin F. Padfield defined relative poverty in Britain as a situation in which people are able to survive adequately, but they are either less well off than they used to be (such as when they retire from paid employment) or that they are at a serious disadvantage "in their ability to experience or enjoy the standard of life of most other people – for example, not being able to afford an annual holiday."

In 2011, there was some discussion of the measurement for poverty being changed (from households earning less than 60% of median income) to a broader analysis of poverty.

The Consensual Method

As opposed to measuring income, the Consensual Method examines which necessities (eg food, clothing, access to healthcare, involvement in social and leisure activities) are thought by the general public to be essential for living in contemporary UK society. Those families or individual who lack a number of these necessities are considered as poor. In the 2012 Poverty and Social Exclusion (PSE) survey on Living Standards, the three necessities deemed as being most often essential to a good standard of living were the ability 'to warm living areas of the home ', a 'damp-free home' and 'two meals a day.'

Six specific surveys of low standards of living in the UK have made use of this method.

• 1983 Breadline Britain Survey
• 1990 Breadline Britain Survey of Britain
• 1999 Poverty and Social Exclusion Survey
• 2002 Poverty and Social Exclusion in Northern Ireland
• The 2012 PSE UK ‘Attitudes to Necessities of Life and Services’ survey
• The 2012 PSE UK 'Living Standards' survey

Other forms of poverty

Water poverty is defined by the Government as spending more than 3% of disposable income on water bills. Nationally, in 2006, nearly 10% of households were in water poverty.

Fuel poverty. A fuel poor household is one that struggles to keep adequately warm at reasonable cost. The most widely accepted definition of a fuel poor household is one which needs to spend more than 10% of its income on all fuel use and to heat the home to an adequate standard of warmth. This is generally defined as 21 °C in the living room and 18 °C in the other occupied rooms. Fuel poverty affects over a million British working households and increases in energy prices affect poor people severely.

See Fuel poverty in the United Kingdom.

Causes of poverty

• Disability - Disabled adults are twice as likely to live in low income households as non-disabled adults.
• Illness
• Mental illness
• Low intelligence - People with an IQ of 60 or below are speculated to be in danger of poverty and homelessness in the USA in 2006.
• Unemployment - benefit sanctions for failing to search for jobs on a full-time basis plunges the already poor unemployed into destitution as a punishment. There are currently not enough jobs in the UK to employ everyone who is looking for work.
• Underemployment - having a low-paid job with wages lower than the living wage, often the minimum wage, and working part-time.
• Being born to poor parents
• Lack of social capital
• Inadequate management of finances
• Being a lone parent - half of all lone parents are on a low income.
• Racial discrimination
• Inherent biases in the economic system, for example having to pay a higher rate of interest on a loan.

Current/recent figures

Eurostat figures show that the numbers of Britons at risk of poverty has fallen to 15.9% in 2014, down from 17.1% in 2010 and 19% in 2005 (after social transfers were taken into account).

If the poverty line is defined as those individuals and households with incomes less than 60% of their respective medians, then "nearly 60%" of those in poverty are homeowners.

Historical measurements of poverty

Seebohm Rowntree chose a basic 'shopping basket' of foods (identical to the rations given in the local workhouse), clothing and housing needs - anyone unable to afford them was deemed to be in poverty. By 1950, with the founding of the modern welfare state, the 'shopping basket' measurement had been abandoned.

The vast and overwhelming majority of people that fill the government's current criteria for poverty status (see above) have goods unimaginable to those in poverty in 1900. Poverty in the developed world is often one of perception; people compare their wealth with neighbours and wider society, not with their ancestors or those in foreign countries. Indeed, this is formalised in the government's measure of poverty. A number of studies have shown that though prosperity in the UK has greatly increased, the level of happiness people report has remained the same or even decreased since the 1950s.

Poverty Reduction

Welfare Overview

People enter the world of poverty due to: problems at the individual/family level and problems with the economy as a whole. Problems at the individual level include: race (human categorization), gender, sexual orientation, drug use, and level of education. Problems with the economy can include: low labor participation and high levels of unemployment . Welfare is financial support given by the government to people in need. There are pressures on the welfare state because welfare must be justified in terms of its contribution to economic success. Welfare must contribute positively to the economy otherwise there is a risk of damaging currency values. Damage to currency values will damage trading positions and investment which will, in turn, hurt the economy overall. The Department of Health and Social Security (DHSS) is responsible for the welfare services in the United Kingdom. Income maintenance is centrally administered through DHSS offices (regional and local level). Those who earn 39 pounds a week (except some married women) or more must contribute to the National Insurance Scheme. The National Health Service (NHS) provides virtually free healthcare for all residents – this is also centrally administered.

Persistent Poverty and Poverty Statistics

Persistent poverty is the effects of experiencing low income for long periods of time. In 2014, 6.5% of the United Kingdom's population was classified as being in persistent poverty; that equates to approximately 3.9 million people. The UK's poverty rate overall in 2014 was the 12th highest amongst all European nations at 16.8%, however; it has the third-lowest persistent poverty rate. Income tends to be measured before or after housing costs are accounted for (BHC or AHC). Poverty levels tend to be higher after housing costs are accounted for because the poorer households need to spend a higher percentage of their income on housing. In 2014-2015, 13.5 million people were in relative low income AHC (an increase of 300,000 from the year before) and 12.9 million people were in absolute low income AHC (a decrease of 700,000 from the year before). Relative low income means that people live in households with income below 60% of the median in a specified year. Absolute income means that people live in households with income below 60% of the median income in some base year. In 2016, the incomes of poor households are extremely sensitive to the activity in the labor market. When any downturn in the labor market occurs, the poorest people in the UK are increasingly more vulnerable and at greater risk. Median income (overall) has moved 2% above pre-crisis (2007-2008) levels. During the recovery period, inequality in workers’ earnings has decreased. There has been strong employment growth along with weak earnings growth which have kept inequality low for several years.

Poverty Reduction Strategies

In 1999, Tony Blair, the former Prime Minister of the United Kingdom, pledged that child poverty in the United Kingdom will end within a generation. The goal was to completely eradicate child poverty by 2020. Poverty is a result of several different factors, some of which include: a lack of education and training, low participation in the labor market, poor working conditions, and affordable housing. The key components of the UK's strategy to fight poverty are to: increase labor market participation of those eligible to work, to make work more advantageous for those receiving social benefits, to promote financial security for families, and to improve access to public transportation. One of the most crucial ways to reduce poverty is to increase benefit take-ups. In 2009-10 almost a third of those who were eligible for means-tested benefits did not claim their benefits. In 2011-2012, 15% of those eligible for Child Tax Credit did not claim their benefits. Also, 35% of those eligible for Working Tax Credit did not claim their benefits neither. Improving these numbers and getting those people to claim their benefits would significantly help reduce poverty. Ways in which can help increase benefit take-up include: simplifying the language so those who receive the benefits understand what they are receiving, making the process of receiving the benefits easier and more efficient, and encouraging benefit take-up. Other important ways to reduce the levels of poverty include: improve mental health, to ensure that children are supported sufficiently enough so that they can receive a quality education, help the unemployed find jobs, and improving child stability. A decrease in poverty would mean a more active economy because more people would have the ability to purchase more consumer goods than before.

Viewpoints of major political parties

Labour Party

While leader of the Labour Government, Tony Blair vowed in 1999 to cut child poverty 25% by 2005, 50% by 2010 and to eradicate child poverty completely by 2020. The Labour Party website states:

"In 1997 Labour inherited one of the highest rates of child poverty in Europe – with one in three children living in poverty. Our mission to abolish child poverty is grounded both in our determination to secure social justice, and to tackle the problems that the social exclusion of children builds up for the long-term. Work is the best route out of poverty and our successful welfare to work measures have lifted millions out of poverty including disabled people, who have too often previously been consigned to a life on benefits. At the same time, millions of families are benefiting from the Child tax credit, the Working tax credit, and record rises in Child benefit."

Their 2005 manifesto states:

"[Since the Labour government came to power in 1997] there are two million fewer children and nearly two million fewer pensioners living in absolute poverty."

Conservative Party

In late November 2006, the Conservative Party garnered headlines across the press when a senior member spoke out on poverty, invoking the name of Polly Toynbee. The headlines began when David Cameron's policy advisor and shadow minister Greg Clark wrote:

"The traditional Conservative vision of welfare as a safety net encompasses another outdated Tory nostrum - that poverty is absolute, not relative. Churchill's safety net is at the bottom: holding people at subsistence level, just above the abyss of hunger and homelessness. It is the social commentator Polly Toynbee who supplies imagery that is more appropriate for Conservative social policy in the twenty first century."

This approach generated much comment and analysis. It was followed two days later by Cameron saying poverty should be seen in relative terms to the rest of society, where people lack those things which others in society take for granted, "those who think otherwise are wrong [...] I believe that poverty is an economic waste, a moral disgrace. [...] We will only tackle the causes of poverty if we give a bigger role to society, tackling poverty is a social responsibility [...] Labour rely too heavily on redistributing money, and on the large, clunking mechanisms of the state."

Beyond Left and Right: Poverty as a Major Fault Line in British Society

Most people's ability to sustain their lifestyle and to participate socially comes under threat at around the bottom 30% of the income distribution, creating a sort of 'participation floor' that seems to demarcate a major divide in British society (Ferragina et al. 2016). The floor begins around the point in the income distribution when the benefit system starts to contribute substantially to people's incomes but is not entirely rigid or for example, it is lower for recipients of social security benefits mainly on account of the greater material deprivation that they experience. For those on the floor, participation is severely constrained with people negotiating a zero-sum world in which spending on one area means reduction in another. Whereas for those above the floor, additional income translates into more evident consumption, greater social participation and trust; for those on the floor it means a slight easing of pressure, but no major change in lifestyle sufficient to be identified in survey evidence. The implications for policy and our understanding of society are profound. Much policy, notably the new Universal Credit that was the flagship policy of the past Coalition Government, seeks to maximise work incentives premised on the notion that additional income brings rewards for individuals in terms of higher living standards, and benefits society through greater consumption and a shared work ethic. Similarly, as emphasised by Lansley and Mack (2015), New Labour during the period 1997–2010 (despite trying to tackle child poverty) intervened mainly through more generous and wide-ranging tax-credits rather than fighting poverty and inequality at source (Ferragina and Arrigoni, 2016).

Pressure/interest groups

The Joseph Rowntree Foundation (site) is one of the largest social policy research and development charities in the UK and takes particular interest in the issue of poverty, with over 100 reports on poverty and disadvantage available on its website (external link to report listing).

The Child Poverty Action Group (site) campaigns for the elimination of poverty amongst children.

End Child Poverty coalition (site) also seeks the eradication of child poverty.

Oxfam UK Poverty Programme site) works with people and policy makers to tackle the causes of poverty.

In July 2013 Freedom from Torture(site) published its report "The Poverty Barrier: The Right to Rehabilitation for Survivors of Torture in the UK which highlights the failings of the UK Asylum System in their handling of torture survivors arriving in the UK. The evidence included in the report comes from the testimony of over 100 survivors of torture and 18 members of Freedom from Torture's clinical department. The report highlights financial insecurity, social exclusion and hopelessness and how poverty prevents the rehabilitation process. One survivor stated: "... Our current living conditions keep our torture trauma still alive. We can't move on."

See also

• Homelessness in England
• Poverty by country
• Income in the United Kingdom
• Hunger in the United Kingdom
• Universal Basic Income

Key sources and external links

Government statistics

• The UK Government's Department of Work and Pensions makes a yearly collection of Households below average income (HBAI) statistics, and has been doing so since 1994-5. The report for 2014-5 includes data and summary the overall income distribution, income equality, sources of income, low income indicators, and data on the relationship between poverty and children, age, pensioners and disability. The Department for Work and Pensions (official site) is responsible for policy relating to social welfare and tends to take the lead in addressing or contributing to poverty

Government reports

• "Measuring Child Poverty" (PDF). Department for Work and Pensions. December 2003. Archived from the original (PDF) on 7 January 2013. 
• "Understanding older people's experiences of poverty and material deprivation." (PDF). DWP. July 2006. Archived from the original (PDF) on 7 January 2013. 

Other sources of reports and analysis

• One hundred years of poverty and policy by Howard Glennerster, John Hills, and David Piachaud and Jo Webb - The Joseph Rowntree Foundation. Contains information on historical trends in poverty and anti-poverty legislation

Government debates (most recent first)

Child poverty debate - Westminster Hall, 4 July 2006.

• Poverty debate - House of Lords, 6 February 2002.
• Student poverty debate - House of Lords, 15 March 2001.

Statistics provided by Government ministers

This is a collection of links to statistics available at the site TheyWorkForYou the relevant content of which is sourced from Hansard.

Child poverty

• Number and percentage of children living in poverty, in each year, 1979-2004.
• Number and percentage of children living in poverty, in each year, 1979-2004 before and after housing costs.
• Percentage of children living in poverty in working or workless households, 2003-04.
• Proportion of children in families with (a) a lone parent, (b) married parents or stepparents and (c) cohabiting parents or stepparents in poverty, 2004-05.
• Number and percentage of children living in poverty, 1997-2004.
• Northern Ireland: children living in the province estimated to be living in poverty, broken down by (a) Northern Ireland local government district and (b) parliamentary constituency, 2002/04.

Pensioner poverty

• Number and percentage of pensioners living in poverty from 1979-2004.
• Pensioners in poverty 1994-2003, broken down by region.

Rural poverty

• Rural poverty, 2002.

Mixed

• Percentage of children and adults living in poverty both before and after housing costs from 1995-2005.
• Poverty among (a) pensioners, (b) the unemployed, (c) disabled and (d) others in 1996/97 and 2003/04.

Miscellaneous

• The average weekly income for a) the lowest earning 40% and b) the highest earning 40% in England as a whole and the South West in particular for 1996/97-1998/99 and 2002/03-2004/05.
• Contains estimates on trends in poverty and inequality in the United Kingdom from 1960 onwards
• Contains estimates on trends in poverty and inequality in the United Kingdom from 1961 onwards
• Contains estimates on the proportion of the population living in poverty from 1961 to 1995

General news items

• Breadline Britain - the welfare state 60 years on - BBC News, 2006.
• Social Exclusion - The Guardian, updated regularly.