In-work poverty continues to rise

Almost three out of five people in poverty live in a household where at least one person is working, according to a new report by the Institute for Fiscal Studies (IFS).

Between 1994 and 2017, the share of poverty accounted for by working households has jumped from 37% to 58%.

This means now a staggering 8 million people in poverty are from working households.

Why are so many people working but still in poverty?

The mantra ‘work is the best route out of poverty’ is a well-known line. But why are so many people going to work and still living in poverty?

One of the major reasons is the extreme inequality in earnings. This has created a wide gap in household incomes. Those on a higher income have seen a greater increase in comparison to those on a lower income. This raises the poverty threshold and consequently pushes more people below it.

In recent years, another significant cause is the increase in housing costs. High private rents, cuts in housing benefits and a fall in home ownership have all caused working people on low incomes to fall into poverty.

Matthew Geer, Campaigns Manager at Turn2us, said:

“Low pay has become an epidemic problem. People have been struggling to keep up with the rising costs of living for a decade now, and high housing costs, low wages and frozen benefits are only exacerbating the situation.

“If you have a job, you should not have to choose between eating and heating. Work has to pay a fair day’s wage and enable people to live with stability and dignity.”