Full-time work is no bar to poverty, report says

19 February 2016

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SOME 2.6 million households with at least one adult in work are still struggling to make ends meet, research by the social-policy research and development charity, Joseph Rowntree Foundation (JRF), suggests.

The research identified 11.6 million people in the UK living below the minimum income standard — a standard that is based on what most people think is needed for an acceptable standard of living. This number, despite the economic recovery, and high employment, has risen by a third in the past five years.

The charity’s report, produced by the Centre for Research in Social Policy at Loughborough University, assessed household incomes in the five years after the banking crisis in 2008.

The data suggested that families were now at higher risk of falling below an acceptable standard of living than they were during the financial crisis. Forty-one per cent of single parents working full-time fell below the minimum-income standard; and couples with children, where both adults worked full-time, also faced a higher risk of falling below the standard. About 88,000 more of these households now lacked the income needed for an adequate standard of living, an increase that was attributed to benefit cuts.

The JRF welcomed the fact that the number of people falling below the acceptable standard of living had slowed last year, and said that couples without children would also be helped by the introduction in April of the national Living Wage (£7.20 an hour). Pensioners, the report showed, were also at a far lower risk than other groups of falling below the minimum standard.

The author of the report, Matt Padley, from Loughborough University, said: “It is good news that things have stopped getting worse overall, although there remain many more people living on low incomes than in 2008. What is more troubling is that for families, even with more work and slightly better pay, the risk of falling below the minimum has continued to rise. Millions of low earners depend not just on wages but also on in-work benefits to make ends meet, and a decline in these benefits has made the most difference to the overall level of their incomes, relative to what they need.”

The charity is calling on the Chancellor, George Osborne, to use next month’s Budget to encourage employers to improve the skills of low-paid workers, and for action to help with the rising cost of childcare, housing, and “high-price essentials”.

It is also recommending an increase in the work allowance — part of the universal credit benefits system of the Work and Pensions Secretary, Iain Duncan Smith — to make sure that work pays.

www.jrf.org.uk/report/households-below-minimum-income-standard-200809-201314

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