UK Poverty 2024
The UK is entering this election year with unacceptably high levels of poverty, appallingly high for some groups. We need a coherent plan with creative policies to end poverty in the UK.
This report looks at the current situation across different groups and regions, and the future prospects for poverty in the UK.
UK Poverty uses a range of data sources and insights to build up a comprehensive picture of the current state of poverty across the UK. As poverty can lead to negative impacts at all stages of life, this report tells us who is worst affected, how levels have changed over time and what the future prospects might be.
Since last year’s report, we have seen even more evidence of the desperate measures that households are having to take to get by, and of the high tides of insecurity that have washed over more and more people.
Below is a summary of the key findings of the UK Poverty 2024 report.
Poverty has increased, close to pre-pandemic levels
More than 1 in 5 people in the UK (22%) were in poverty in 2021/22 – 14.4 million people. This included:
- 8.1 million (or around 2 in 10) working-age adults
- 4.2 million (or nearly 3 in 10) children
- 2.1 million (or around 1 in 6) pensioners.
Poverty rates have returned to around their pre-pandemic levels, as middle-income household incomes rose at the same time as a range of temporary coronavirus-related support was withdrawn.
It has been almost 20 years and 6 prime ministers since the last prolonged period of falling poverty
The overall level of poverty has barely moved since Conservative-led Governments took power in 2010. Poverty last fell consistently during the first half of the last Labour administration (between 1999/2000 and 2004/05), but then rose in the second half of their time in power. In part, this reflects the hits to living standards that have affected everyone, from the economic slowdown even before the global financial crisis to the current cost of living crisis.
Before 1979, levels of poverty had been broadly flat at around 14%. In the 1980s, under the Conservative Government of Margaret Thatcher, there was then an unprecedented rise in poverty even at a time of high income growth, due to very unequal income growth over this period. This has not been reversed, meaning current levels of poverty are around 50% higher than they were in the 1970s.
Poverty is deepening
In 2021/22, 6 million people - or 4 in 10 people in poverty – were in ‘very deep’ poverty, with an income far below the standard poverty line. More than twice as many (over 12 million people) had experienced very deep poverty in at least one year between 2017–18 and 2020–21.
Between 2019/20 and 2021/22, the average person in poverty had an income 29% below the poverty line, with the gap up from 23% between 1994/95 and 1996/97. The poorest families – those living in very deep poverty – had an average income that was 59% below the poverty line, with this gap increasing by around two-thirds over the past 25 years.
This is equivalent to a couple with 2 children under 14 years old needing, on average:
- an additional £6,200 per year to reach the poverty line if they are living in poverty
- an additional £12,800 per year to reach the poverty line if they are living in very deep poverty.
We saw from our latest Destitution in the UK report that around 3.8 million people experienced destitution (where they could not afford to meet their most basic physical needs to stay warm, dry, clean and fed) in 2022. This included around one million children. These figures have more than doubled since 2017. There is further evidence of deepening poverty in the increasing number of people using food banks, with more emergency food parcels being delivered by the Trussell Trust network than ever before.
Certain groups have wholly unacceptably high rates of poverty
Some groups of people face particularly high levels of poverty. This includes:
- Larger families - 43% of children in families with 3 or more children were in poverty in 2021/22. A number of benefit policies, including the two-child limit and the benefit cap, have a disproportionate impact on larger families.
- Families whose childcare responsibilities limit their ability to work – 44% of children in lone-parent families were in poverty in 2021/22, as were 32% of children in families where the youngest child was aged under 5.
- Many minority ethnic groups – around half of people in Pakistani (51%) and Bangladeshi households (53%) and around 4 in 10 people in households headed by someone from an Asian background other than Indian, Pakistani, Bangladeshi or Chinese (39%) or households from Black African backgrounds (42%) were in poverty between 2019/20 and 2021/22. These households also have higher rates of child poverty, very deep poverty and persistent poverty.
- Disabled people – in 2021/22, 31% of disabled people were in poverty. This was even higher (38%) for people with a long-term, limiting mental health condition. Higher poverty rates for disabled people are partly due to the additional costs associated with disability and ill health and partly due to the barriers to work they face.
- Informal carers – 28% of people with caring responsibilities were in poverty in 2021/22. Informal carers face a financial penalty, because of their limited ability to work, with unpaid social-care givers experiencing an average pay penalty of nearly £5,000 a year.
- Families not in work – more than half of working-age adults (56%) in workless households were in poverty in 2021/22, compared with 15% in working households. However, because a high share of the population is in work, around two-thirds of working-age adults in poverty actually lived in a household where someone was in work.
- Part-time workers and the self-employed - amongst people in work, the poverty rate for part-time workers was double that for full-time workers (20% compared with 10%) and self-employed workers were more than twice as likely to be in poverty as employees (23% compared with 10%).
- People living in rented accommodation – in 2021/22, more than 4 in 10 social renters (43%) and around a third of private renters (35%) were in poverty after housing costs. Around a third of these social renters and half of these private renters were only in poverty after their housing costs were factored in, so appear to be pushed into poverty by the amount they have to spend on housing.
- Families claiming income-related benefits – their high poverty rates may be expected given the ‘low income’ eligibility criteria for claiming these benefits, but it demonstrates that benefit levels are frequently not sufficient to enable recipients to escape poverty. Indeed, the basic rate of Universal Credit is even below destitution thresholds.
Poverty across the UK
Poverty rates vary significantly between UK nations and regions
Between 2019/20 and 2021/22, the average poverty rates in England (22%), Wales (22%) and Scotland (21%) had converged to around the same level, although poverty rates were much lower in Northern Ireland (16%).
Between 2019/20 and 2021/22, the West Midlands had the highest rate of poverty at 27%, followed by the North East and London (both 25%), Yorkshire and The Humber, the East Midlands and the North West (all 23%).
These variations are driven by differences in labour markets, housing markets and rates of benefit receipt, alongside wider demographic factors of the population in each nation or region. The greater reliance on renting and the higher costs of housing are a substantial driver in larger cities in particular (including London), while lower rates of employment, fewer employment opportunities and a greater concentration of employment in lower-paid roles, are bigger drivers in many post-industrial and coastal areas (including the West Midlands and the North East of England).
Child poverty rates in Scotland (24%) remain much lower than those in England (31%) and Wales (28%) and are similar (if slightly higher) than in Northern Ireland (22%). This is likely to be due, at least in part, to the Scottish Child Payment. This highlights the effect benefits can have in reducing poverty.
Cost of living crisis continues to bite
In October 2023, around:
- 2.8 million of the poorest fifth of households (47%) were in arrears with their household bills or behind on scheduled lending repayments
- 4.2 million households (72%) were going without essentials
- 3.4 million households (58%) reported not having enough money for food.
This is why it is so important that the Government has uprated benefits in an appropriate way and has re-established the link between housing support and rents. However, it is very worrying that many of the Government’s support schemes are ending, especially when the basic rates of benefits are below destitution levels and millions are going without essentials.
The future remains deeply worrying
Inflation is still running at twice its target level, benefits are taking time to catch up with rising prices, employment is starting to fall, earnings are still below their 2008 levels, and housing costs are increasing rapidly. Given the Office for Budget Responsibility forecasts that average household disposable incomes will continue to fall until 2024/25, these effects will have a profound impact on many people’s living standards for years to come.
What can be done?
People recognise the scale of the problem facing the country and the need to take action. The British Social Attitudes survey found that the proportion of people who think there is quite a lot of real poverty in Britain has increased by nearly 20 percentage points since 2006, while the majority of the British public, in surveys since 2017, has agreed that the Government should increase tax and spending on health, education and social benefits. Meanwhile, the cost of living crisis is putting pressure on families across the county and in November 2023, our polling found that 73% of the British public were very or fairly worried about the cost of essentials.
We have now experienced nearly 3 tough years of accelerating inflation and 4 desperate years since the start of the COVID-19 pandemic. There was little progress on headline poverty and increasing levels of deep poverty and destitution even before then.
In our UK Poverty 2020 report, published immediately before the pandemic, we said:
For a decent standard of living, we all need security and stability in our lives – secure housing, a reliable income, and support when things get difficult. For too many of us, there is no such security. Millions of people in the UK are struggling to get by, leading insecure and precarious lives, held back from improving their living standards. It’s time to take action on poverty and put this right.
This remains our clarion call and the key test we will be using to evaluate political parties’ plans to tackle hardship and expand the foundations of economic security to everyone ahead of the next election. This requires action to reset our social and economic fundamentals, starting with:
- help and space for people looking for work to find a secure job that sticks, while making work possible and desirable for those outside the labour market where possible
- raising the basic level of workplace rights and protections, including expanding rights to flexible working, and improving financial protection for people who lose their job or cannot work
- protecting time for caring around work, while building up and strengthening the infrastructure of care services for families to rely on
- ensuring social security provides enough income to afford the essentials, at the same time as forging a ‘social safety net’ of crisis support, practical help and connection in people’s communities
- making future pension provision more secure, by raising minimum contribution rates and establishing good options for people to use their savings to provide a secure standard of living in retirement
- helping people build up modest savings, access affordable credit, gain relief from problem debt and hold assets
- expanding access to secure homes, whether rented or owned, by building more new homes and shifting the distribution of existing homes.
Beyond this, we need a vision for reducing the level, depth and extremes of poverty across the UK. This requires a suite of policies that make up a coherent overall plan to end poverty in the UK that is proportionate to the size of the challenge we face.
The Government must act with compassion, drawing on the lived experience of people who have gone through hardship. It must also implement creative policy innovations that enable everyone to live with dignity, to be able to seize opportunities and, most importantly, to build a sense of hope for a better future.