New report shows more working families in poverty

A new report from the Institute of Fiscal Studies (IFS) shows that most poor people now live in households where someone is working and that those over 60 are now the least likely group to be in income poverty. 

The report shows that the old link between worklessness and child poverty has reduced, with the proportion of children living in workless households decreasing from 1 in 4 in 1994/5 to 1 in 6 in 2014/15. However, the report continues that as of 2014/15, two-thirds of children classified as living below the poverty line had at least one parent who was working. 

Dubbed by the report as “the new poor”, this section of middle income families with children, now receive up to 30% of their income from the state; an almost 50% increase in 20 years. Additionally, half of these middle income families also live in rented accommodation instead of being owner-occupiers.

One reason for this growing income gap between young and old was that pensioners have experienced a "strong growth" in benefits and more people over 60 are still working. Since 2010 the state pension has risen according to the "triple lock" - whichever is the higher of inflation, earnings or 2.5%. Pensioners are also entitled to non-means-tested winter fuel payments, free bus travel and free prescriptions. By contrast young people have failed to benefit from an improving jobs market as quickly as some other age groups.

Turn2us Comments

Turn2us Chief Executive Simon Hopkins commented: “We welcome this report from the IFS which shows that, despite record levels of employment, more and more working people are living in poverty. Clearly, employment is no longer a bar to poverty and it’s crucial that there remains a sustained effort to ensure that people are aware of the practical help that is available.

“Our own research* has shown that almost half (48%) of low income households are not claiming the welfare benefits and tax credits they could be entitled to. This means around £16bn in welfare support still goes unclaimed every year. But with 88% of parents who do claim saying the extra support has had a positive financial impact, we would urge families struggling to make ends meet to visit our website to see what help could be available.”

Read more about this story on the Independent website.

*Survey conducted with Research Now in March 2016. Total sample size was 1,512 adults with annual household incomes of £25,000 and less before tax and deductions. Results were then analysed for those who were claiming means-tested benefits and tax credits, and those who were not claiming any means-tested benefits or tax credits