We have a new way to measure poverty – now let’s act to solve it

We no longer need to be side-tracked by debates about poverty measures, says Helen Barnard. It’s time for action to loosen its grip on the UK.

We are living in deeply divided times. But today’s launch of a new poverty measure for the UK shows it is still possible to achieve consensus; not by ignoring different views, shouting them down or making trades, but by taking the time to develop real understanding and respect, rediscovering the shared values that we all hold.

For over 100 years, we at the Joseph Rowntree Foundation have been examining the trends and causes of poverty in the UK. Seebohm Rowntree’s ground-breaking study of poverty in York alerted the country to the fact that poverty takes hold in all parts of the land and all communities.

We all want to live in a society where everyone is able to meet their needs; we believe in protecting one another from harm. Knowing who is locked in poverty is the first step to take action to solve it.

A group of deeply committed thinkers from very different backgrounds and political standpoints came together two and a half years ago. We have worked together, moved forward together and arrived at a place that many thought would not be possible.  

We were all determined to establish a measure of poverty that reflects the real experiences of people across the UK and shows clearly who is locked in poverty. After two years of deliberation, debate and late nights crunching data, we have achieved our goal: a measure we are united behind, that is robust, clear and rewards good policy choices.

Our new measure builds on the work of many and varied people over the years, from academics to activists. It rests on the simple idea that living in poverty is about not having the resources to meet your needs. It improves on previous measures in many ways.

Three of the most important are:

  • the changes we have made to what is included as resources
  • how the cost of living is treated, and
  • a wider set of measures looking at persistence, depth and the broader aspects of people’s lives that are closely linked to poverty.  

Resources

We know that weekly income is not the only resource people draw on to meet their needs; those with substantial liquid savings can use them to meet unexpected expenses, tide them over temporary falls in income or take opportunities like training to improve their prospects. So, the new measure adds liquid savings to weekly income (with the assumption that people wouldn’t spend all their savings at once but could draw them down over a longer period like a year).  

Costs

The cost of housing is one of the biggest regular expenses for many people. Money spent on rent cannot be used to pay for food or to take a bus. So, we deduct regular housing costs from income to see what is left for other expenses.

For families with children, childcare can be an expense to rival rent, and is often necessary for them to work. Therefore, we also deduct what people spend on childcare.

There is a wealth of evidence showing that disabled people face much higher costs than non-disabled people to achieve the same standard of living. We do not yet have good enough direct evidence of those costs and how they vary between people with different types and severity of conditions. This is a gap that we believe should be filled. However, we can see in the data that some people receive benefits that are specifically intended to cover those additional costs. So, for now, our measure deducts the income that is intended to cover those costs, since we assume that it is not available to spend on other expenses.

A wider framework

Knowing who is in poverty right now is the first and most important step. But we know that living in poverty for long periods is especially damaging. So, our framework includes a measure of persistent poverty. We also know that the deeper poverty becomes the worse its effects, risking pushing people into destitution. Our measure enables us to see who is just below the poverty line and who is very far below it. 

We also look at who is above the poverty line, but only just, as this often means people are at higher risk of being swept into poverty. Finally, a range of factors can be a cause or consequence of poverty, make the lives of people on low incomes easier or harder, and can help or hinder people to move out. These include physical and mental health conditions, social isolation, a lack of qualifications, low literacy and numeracy, and strained family relationships.

What have we learned?

The new measure shows that:

  • 14.2 million people are in poverty, including 4.5 million children, 8.4 million working-age adults; and 1.4 million pensioners. The new measure has demonstrated that more children and working-age adults are in poverty, and somewhat fewer pensioners than we’d thought previously.
  • Nearly half of people locked in poverty (6.9 million) are disabled themselves or live in a family with someone who is.
  • One in eight people in the UK is in persistent poverty: they are in poverty now and have been in poverty in at least two of the previous three years. Persistent poverty is highest for those in workless families and disabled families.
  • Around 8.2 million people are more than 25% below the poverty line, and 2.5 million people are less than 10% above it.

What now?

We believe that it is time to stop arguing about measurement. We call on the Office of National Statistics and the Department of Work and Pensions to take up this measure and use it monitor poverty in the UK.

We have come together to establish a shared understanding of who is in poverty; and confirmed our shared belief it is not right for so many people to be locked in poverty. 

Now it is time to demand concerted action to solve it – governments, employers, businesses and communities all need to take action so that we do not find ourselves in 100 years’ time still reporting that millions of people struggle to make ends meet.