Work and poverty

Among working-age adults, the in-work poverty rate was 12%, compared with 41% for those who were not in work. However, these headline figures mask substantial variation depending on employment type, hours worked, and the reasons for being out of work.

Full-time employees had the lowest poverty rate at 8%. Poverty rates were considerably higher among full-time self-employed workers (22%) and part-time employees (22%), while part-time self-employed workers faced the highest in-work poverty rate at 28%. Self-employment is associated with elevated poverty risk regardless of hours worked: full-time self-employed workers face a similar poverty risk to part-time employees, highlighting the insecurity that can persist even with full-time hours.

Being out of work carries a much higher risk of poverty. Among unemployed working-age adults — those who are out of work but available for and seeking employment — the poverty rate was 53%, nearly 5 times higher than for those in work. Economically inactive adults (those not seeking or available for work), largely due to permanent sickness or disability, had a poverty rate of 37%. Adults who had taken early retirement had a lower poverty rate of 25%, though this remained more than 3 times higher than for people in employment.

Working-age adults from minority ethnic backgrounds were consistently more likely to live in poverty than their white counterparts, even when in work. Poverty rates were particularly high among Bangladeshi (37%) and Pakistani (32%) working-age adults who were in work.

The sector someone works in is another strong determinant of poverty risk. This reflects differences in pay levels as well as variation in working patterns, with some sectors having much higher proportions of part-time and self-employed workers — both of which are associated with higher poverty rates.

Poverty rates were highest among workers in accommodation and food services (22%), administrative and support services (22%), and agriculture, forestry and fishing (19%), all well above the 12% in-work average. Other sectors with above-average poverty rates included other services (18%), transportation and storage (16%), and wholesale and retail (15%).

These sectors are characterised by higher levels of insecure work. Nearly half of workers in agriculture (44%) were self-employed, compared with an average of 11% across all sectors. Similarly, part-time work was far more common in accommodation and food services (41%), other services (34%), wholesale and retail (32%), and administrative and support services (28%), compared with an overall average of 20%.

In-work poverty rose steadily through the late 2000s and 2010s, increasing from a low of 10% in 2001/02 to a peak of 13% between 2014/15 and 2019/20. Since 2021/22, the rate has fallen slightly and stabilised at 12%, including in the latest data for 2023/24.

While this change may appear modest, the number of people affected has grown substantially. The number of workers living in poverty increased from 2.5 million in 2000/01 to 3.8 million in 2023/24 — a rise of 51%, compared with a 23% increase in the overall workforce. This shows that although employment has expanded, it has not delivered financial security for a growing share of workers.

Across the past two decades, full-time employees have consistently had the lowest poverty rates, remaining broadly stable at around 8%. By contrast, poverty rates among self-employed workers — particularly those working part-time — have risen sharply. Among part-time self-employed workers, poverty increased by 7 percentage points, from 21% in 2000/01 to 28% in 2023/24. Part-time employees saw a similar rise, with poverty increasing by 6 percentage points from around 16% in the early 2000s to 22% in 2023/24.

Over the same period, the number of part-time employees grew by around 14%, from 4.6 million to 5.2 million. The number of people working part-time and self-employed grew faster still, increasing by 61% from around 600,000 to 900,000. This growth in insecure forms of work has played a significant role in the long-term rise in in-work poverty.