Who is at risk and why?
Children who live in a household where no parent works are in the highest risk category of being in poverty. In addition, the Institute of Fiscal Studies has reported that the Government’s 1% cap on welfare benefit increase will see:
89% of the 2.8 million households where working age adults are without jobs will see their entitlements reduced in real terms. This equates to an average of about £215 per year less in 2015-16.
49% of 14.1 million working age households with someone in work will see their entitlements cut compared to what they might have expected. This will be by an average of about £165 per year, This includes three million who lose out only from the child benefit cap.
Those with the lowest incomes will be affected the most, with the second lowest 10th of the UK population hit hardest in cash terms, with an average drop of £150 per year.
The Institute for Fiscal Studies (IFS) show that about 17.5% of children in the UK grow up in relative poverty (household income below 60% of the median) compared with 16.1% of the general population. Similarly, about 17.5% of pensioners are in relative poverty. 14.6% of working age non-parents are in relative poverty (IFS, 2012).
A million young economically active people aged 16 to 24 years were unemployed in the first half of 2012. That is 22%, compared with 6% for those aged 25 to 64 years (Joseph Rowntree Foundation, 2012).
Pensioner poverty has fallen from 29% in 1998/99 to 18% in 2007/08. However, many pensioners remain with incomes at, or just above, 60% of median income and there are still about 1.1million pensioners living in poverty (Work and Pensions Committee, 2009).
The composition of those in poverty is very different today than 10 or 20 years ago. The proportion of pensioners in poverty has halved since the early 1990s, while that of working age adults without children has risen by one third (Joseph Rowntree Foundation, 2012).
In 2010/11, 2.3 million children (18%) were in households living below 60% of median income before housing costs and 3.6 million (27%) after housing costs (DWP, 2012b).
Female full-time workers are paid about 82% of the amount males receive. That is £449.60 per week for women compared with £548.80 for men (Nomis, 2012).
Health inequalities between deprived and non-deprived areas have grown in the last decade. A man in one of the least deprived areas can expect to live longer than a woman in one of the most deprived areas (Joseph Rowntree Foundation, 2012).
Female single pensioners are more likely to live in poverty than single male pensioners; 23% compared with 16% (DWP, 2012b).
Few high street banks demonstrate any strong commitment to serving people on low incomes, who often incur charges because they find it difficult to manage facilities such as direct debit. Charges for failed transactions and unauthorised overdrafts are commonplace among people on low incomes. (Kempson and Collard, 2012).
Many people on low incomes rely heavily on unsecured consumer credit to meet periodic needs. Their credit options are generally limited to higher cost providers in the credit market such as home credit, goods bought on credit from mail order catalogues or rental purchase shops.
Around one in twenty households does not have access to a transactional bank account and many who have recently opened a bank account struggle with some of the facilities provided (Kempson and Collard, 2012).
Child poverty is more common in all BME groups compared with white ethnic groups. In particular, 49% of children from Pakistani and Bangldeshi ethnic groups and 40% of children from Black or Black British ethnic groups were in relative poverty in 2010 compared with 19.4% of the whole population (Family and Parenting Institute, 2012).
About one-third of children in families where there are four or more children grow up in poverty – roughly double the rate found in families with one or two children (Family and Parenting Institute, 2012).
People in poverty may not have enough income to afford sufficient food. In 2011/12, over 128,000 households in the UK were helped by food banks (Trussell Trust, 2012).