William Eichler 23 May 2017

In-work poverty hits record numbers, report reveals

In-work poverty hits record numbers, report reveals image

Over half of those living in poverty in the UK live in a household where someone is in work, research reveals.

A report by Dr Rod Hick and Dr Alba Lanau from Cardiff University’s School of Social Sciences has found 60% of people in poverty are in working households - the highest figure recorded.

The research, which was funded by the Nuffield Foundation, found the risk of poverty for adults living in working households rose by more than a quarter (26.5%), from 12.4% to 15.7%, during the ten year period 2004/5 to 2014/15.

The findings suggest the number of workers in a household, and not low pay, is the primary determinant of in-work poverty.

‘There has been a lot of discussion recently about how increasing the minimum wage can help to reduce poverty,’ according to Dr Hick.

‘However, what our report finds is that less than half of adults experiencing in-work poverty have a low paid worker in their household, and most low paid workers live in non-poor households.’

Dr Hick said tackling in-work poverty required ‘re-thinking our approach’.

‘It’s about improving the circumstances of the whole household, not just those of an individual worker, and promoting employment is key,’ he noted.

The research found tax credits had been ‘quite highly effective’ in reducing in-work poverty. However, it discovered that through a combination of cuts and low take-up, less than half of working poor households receive them.

The report also found the rise in in-work poverty has been concentrated among households in the private rented sector and amongst social housing tenants.

‘Our research finds that housing costs are becoming an increasingly important factor in determining poverty rates amongst working families,’ said Dr Hicks.

‘If policy does not do more to tackle rising housing costs directly, then it seems likely that these will eat up gains made elsewhere – for example, in terms of the planned increases in the minimum wage.’

The report recommends the expansion of childcare opportunities to help families with children to take up additional paid employment and the reversing of tax credit cuts.

It also said tackling high housing costs would help alleviate the problem of in-work poverty.

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