Counting the cost of UK poverty

Glen Bramley, Donald Hirsch, Mandy Littlewood and David Watkins
1st Aug 2016

This report estimates the more tangible cost that poverty brings to society, specifically in the form of the cost to the public purse.

It illustrates the magnitude of the cost of poverty in order to show the kinds of savings that a sustained reduction in poverty could bring. It also looks at some longer-term consequences of poverty to the Treasury, in terms of reduced revenues and increased benefit payments to people whose earnings potential will be damaged in the future by the experience of poverty today.

The report shows that:

  • the public service costs of poverty amount to around £69 billion, with identifiable knock-on effects of child poverty costing a further £6 billion and knock-on effects of adult poverty costing at least £2.7 billion;
  • this gives a total cost of poverty in the UK of around £78 billion;
  • a large proportion of what we spend publicly (about £1 in every £5 spent on public services) is making up for the way that poverty damages people’s lives.
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