Persistent poverty: the UK needs to get better at preventing people falling back into poverty

New figures on persistent poverty show that the UK is good at supporting people to move out of poverty – but bad at preventing them falling back in. Helen Barnard looks at the lessons the UK can learn to break the cycle.

New figures from the ONS show that just under a third of people in the UK experienced poverty between 2011 – 2014. Just over a third of them were in persistent poverty – in poverty for two or three years at a time. Compared to other EU countries, the UK’s overall poverty rate is about average, but our persistent poverty rate is among the lowest. We know that being in poverty for long periods of time is particularly damaging, so the fact that 3.9 million people are stuck in this state is of great concern. However, digging below the headline figures highlights an important fact about the UK’s performance on poverty – we have one of the highest rates of people moving out of poverty, but also one of the highest rates of people going into it.

Average poverty entry and exit rates for working-age adults in EU member states (2010-2013)

So we are pretty good at getting people out of poverty, helped by rising employment in recent years. But many people fall back into poverty and are unable to secure a decent standard of living for a sustainable period of time. In 2014, 4,156,000 people entered poverty and 4,651,000 people exited poverty. This is important because cycling in and out of poverty, often without ever reaching a secure standard of living, is damaging to our economy and wastes people’s talent and potential.

What explains the UK’s unusual pattern of high exit and entry rates to poverty? One factor is likely to be our labour market. We have a higher proportion of low skilled and low paid jobs than most other Northern and Western European countries, and many people doing short term, insecure jobs. Previous analysis found that 70% of people in poverty move out when they get a job – 30% do not. Those who go into temporary jobs are more likely to end up back in poverty in the following year.

Tomorrow’s Queen Speech provides an opportunity to ensure people have the opportunity to escape poverty and find economic security. But there are two big lessons the UK can learn from the ONS figures:

Today’s figures carry two big lessons for the UK.

1. The original rationale behind Universal Credit is still right.

We need a benefit system which supports people as they move in and out of work and which aims to help them improve their situation until they are securely out of poverty. The whole welfare-to-work system should focus on enabling people to sustainably improve their incomes, not just move off a particular benefit for a few months.

2. We need better jobs, not just more jobs.

Jobs which are better paid, secure and offer routes for promotion provide a much better pathway out of poverty than the short term, low paid work which is too often all that is on offer for people in poverty.

A comprehensive approach to an all-out assault on poverty should include measures to prevent people falling into poverty and improving their life chances, for instance by having a good education system. Later this year, JRF will be publishing our anti-poverty strategy which sets out concrete proposals for the welfare to work system and to improve the types of jobs on offer to those in poverty. Tackling poverty in the UK means preventing people getting into poverty in the first place and reducing the rate at which they slip back in, as well as helping them move out.