What is the projected level of need?
Relative child poverty is set to increase between 2010/11 and 2015/16 by about 400,000 in the UK. In the same time period absolute child poverty (as defined in the Child Poverty Act 2010) will increase by 500,000. About half of these increases will be in households where the youngest child is aged under 5 years. (Family and Parenting Institute, 2012). Such increases in Stockton-on-Tees would place an additional 1,200 children in relative poverty or 1,500 in absolute poverty.
The number of children in relative poverty is forecast to rise from 2.6 million in 2009/10 to 3.3 million by 2020/21 (measuring income before housing costs), and that of working-age adults from 5.7 million in 2009/10 to 7.5 million by 2020/21. The proportion of children in absolute poverty (using the 2010/11 poverty line fixed in real terms) is forecast to rise to 23 per cent by 2020/21, compared with the 5 per cent target (Joseph Rowntree Foundation, 2011).
The projections in Working Futures 2010-2020 indicate that many long-term employment trends will continue, including shifts towards a knowledge- and service-based economy and increases in high-paid and low-paid jobs at the expense of those in the middle (Joseph Rowntree Foundation, 2012b).
These changes in employment structure will contribute to an increase in poverty rates by 2020, although it is the growing gap between benefits and wages that is the main driver of increasing relative poverty rates.
Absolute poverty will rise considerably in the next few years as earnings growth is forecast to be weak but inflation high. Real median household income will remain below its 2009/10 level in 2015/16 (Joseph Rowntree Foundation, 2011).
Pensioner poverty is forecast to continue falling from around 15% in 2011 to around 14% in 2017. By 2025, between 8 and 11% of pensioners are expected to be in poverty but this is dependent on national pension policy (Pensions Policy Institute, 2011). However, the fall in the rate of pensioner poverty coincides with a rising pensioner population, so the number of pensioners in poverty in Stockton-on-Tees may not change significantly.
The phased introduction of Universal Credit from April 2014 is expected to benefit low-income, working age families the most. Households with one earner (either with or without children) are expected to benefit more than other household types (Family and Parenting Institute, 2012; Joseph Rowntree Foundation, 2011).