Poverty in Wales 2025

Twenty years ago, JRF’s first report on poverty in Wales found a sustained and welcome decrease in poverty since the mid-1990s. Its latest analysis brings no such good news, with headline rates of poverty flatlining in the 2 decades since. That is bad enough, but most worrying of all is the rise in very deep poverty. Today, almost half of all people in poverty in Wales have incomes so low that they are in this extreme situation: this means more people forced to use food banks, unable to heat their homes or living in temporary accommodation. The human cost of poverty, especially deep poverty, and its impact on public services are huge.

Underlying this 21st-century social failure are many years of deep cuts to social security, along with a shortage of decent jobs and affordable housing. A fair and adequate social security system is, of course, a UK Government responsibility, but there is much that the Welsh Government can do to complement the UK system. Its own devolved grants and allowances have a key role to play, but removing barriers to work, increasing the number and quality of jobs, and ensuring that there is sufficient, adequate housing are vital too. The steps it has taken to date, such as providing emergency cash help from the Discretionary Assistance Fund, offering free school meals (FSM) for primary school children, and increasing the Education Maintenance Allowance, are welcome, but there is much more to do.

Without action, the outlook is even more challenging. Elsewhere, JRF has forecast that child poverty in Wales will rise to one of the highest rates in the UK by 2029. This report includes other forewarnings of trouble ahead: these include disabled adults in poverty, many of whom will, in time, become disabled pensioners; and the people who own their homes outright but live in income poverty.

Poverty matters. It is in every community in Wales, amongst people of all ages, all backgrounds and in all types of families. It blights lives and costs the public purse. It is a moral outrage. With less than a year to go until the next Senedd election, we look forward to political parties taking poverty seriously and committing to ambitious yet practical steps to turn the tide.

There has been little progress in reducing poverty in Wales over the past 20 years, with poverty rates consistently hovering around 21–22%. Currently, over 1 in 5 people in Wales (22%) live in poverty, totalling 700,000 individuals. This includes 400,000 working-age adults, 200,000 children and 100,000 pensioners living in poverty in 2021–24. Over the past 30 years, children have consistently faced the highest poverty rates, with pensioners currently having lower poverty rates than working-age adults, both with and without children.

In 2020–23, nearly half a million people in Wales lived in deep poverty, with 310,000 in very deep poverty. Poverty has intensified over time, with the proportion of people in very deep poverty rising from 33% in 1994–97 to 47% in 2020–23. The growing gap between household incomes and the poverty line highlights the deepening severity of poverty in Wales. In 2020–23, a couple with 2 primary-school-aged children living in very deep poverty would have needed an additional £13,500 a year to reach the poverty threshold – up from £8,000 in 1994–97, a two-thirds increase – and families in deep poverty faced a shortfall of £10,900.

This deepening of poverty is extremely worrying and shows how important it is that people in deepest poverty feel the benefits of future political decisions and economic changes rather than being disproportionately and negatively affected. It also highlights the challenge that the Welsh Government faces. Its actions may be putting money back into people’s pockets, but it is very difficult to reduce headline rates of poverty against such a backdrop.

The poverty rate for disabled individuals in Wales stands at a concerning 32%, significantly higher than the 22% for non-disabled individuals. The disparity is even more pronounced among working-age adults, with 37% of disabled working-age adults living in poverty, nearly double the 19% rate for their non-disabled counterparts. This higher risk of poverty among disabled people is driven partly by the additional costs associated with disability and ill-health, and partly by the barriers to work that disabled people face. This also brings into focus the potentially devastating effects on poverty levels of changes to the eligibility for Personal Independence Payments, and changes to the eligibility and rates of health-related elements of Universal Credit (UC), which will increase poverty in the UK by up to 400,000 people.

A key driver of higher poverty rates is the lower employment rate among disabled individuals and families with a disabled member. Only 41% of disabled working-age adults in Wales are employed, compared to 80% of their non-disabled counterparts. Employment rates also vary significantly between those with different disabilities: 38% for those with long-term mental health conditions, 48% for those with physical disabilities and 61% for those with other disabilities. These employment disparities contribute significantly to the higher poverty rates experienced by disabled people, and it is critical that the extra funding for employment support is used effectively.

Similarly, informal carers are more likely to live in poverty (31% versus 22%). They often struggle to balance work and care, face additional costs, and experience poorer health outcomes. In Wales, 1 in 10 adults (250,000) are informal carers, with 70% living in families with a disabled member. Most carers are women and of working age, with nearly 60% providing care for fewer than 35 hours a week and over 40% for 35 hours or more.

Poverty rates in Wales show important disparities across different family types, reflecting broader UK trends. Larger families, lone-parent families and families with younger children face higher poverty rates. The highest poverty rates among working-age adults are seen in those aged over 60 (26%) and those aged 16–29 (24%). Children in families with 3 or more children have a poverty rate of 43%, significantly higher than those in one- or 2-child families (23% and 18%, respectively), with the 2-child limit, which restricts eligibility for child-related benefits to the first 2 children in a household, playing a key role in driving up the difference. Poverty rates also vary by the age of children, with 40% of children aged under 5 living in poverty, compared to 28% for ages 5–10 and 23% for ages 11–19.

Rates of poverty vary substantially by tenure and are particularly high among renters. In 2020–23, more than 4 in 10 social renters (46%) and around a third of private renters (31%) were in poverty after housing costs. 

We can clearly see the consequences of poverty in data on food bank use or struggling to afford essentials, when between May 2021 and September 2024, as the worst of the inflation crisis hit family incomes, the proportion of Welsh adults reporting an inability to afford the basics sometimes, often or always doubled from 8% to 15%. Citizens Advice data also highlights a dramatic increase in the number of people seeking help with energy debt – these cases surged by 144% between 2019 and 2024. Finally, if we compare the percentage change in food parcel distribution by Trussell between 2018/19 and 2023/24, we see a 61% increase in Wales.

Poverty in Wales has profound and lasting consequences on health and education outcomes. Working-age adults in poverty, particularly those aged 35–49, are significantly more likely to experience poor health compared to their wealthier counterparts. This disparity continues into older age, with those over 65 in poverty also facing higher health risks. Life expectancy gaps between the most and least deprived areas are stark, with women in the least deprived areas living 6.3 years longer and men 7.5 years longer. Alarmingly, life expectancy in the most deprived areas has declined since 2011–13.

The healthy life expectancy gap is equally concerning, with men in the most deprived areas living 13.4 fewer healthy years and women 16.9 fewer healthy years. Young adults aged 16–34 in poverty have a significant increase in health issues compared to young adults not in poverty, highlighting the persistent health inequalities that exist from birth and continue throughout life. These factors underscore the urgent need for effective measures to address the deep-rooted impact and lasting consequences of poverty on health in Wales.

Data used to identify children from low-income households highlights notable attainment gaps. Year 6 students receiving FSM are over 2 years behind their peers in numeracy and reading. Despite changes in the education system, the gap between disadvantaged and non-disadvantaged children remains. These persistent disparities underscore the lasting impact of poverty on educational outcomes. Children from low-income households in Wales consistently face educational disadvantages, which can limit their future opportunities and perpetuate cycles of poverty.

This report uses rolling 3-year averages to compensate for low sample sizes of Welsh data throughout, unless otherwise stated. Where 5 or 7-year averages are used, this is noted explicitly in an endnote or source note.

Most of the official poverty data (from the Households Below Average Income (HBAI) series) used in this report ends at 2022/23. There remains a Covid-19-related effect on the data collection, but methods gradually returned to their pre-pandemic modes (see Annex 2 of UK Poverty for details). The latest HBAI data for 2023/24 was released near the completion of this report and is used in the overall poverty section only. Any revisions in earlier data are also not presented, as the full dataset has not yet been released.

Thank you to all the team at Joseph Rowntree Foundation who worked on the report, including: Taha Bokhari, Scot Hunter, Francisca Ladouch, Peter Matejic and Sam Tims. Thank you to Steffan Evans and Victoria Winckler of the Bevan Foundation for their assistance in producing this report.