Poorest households need to ‘double their income’ to escape poverty

Six million of the poorest people would need to double their income in order to escape poverty, a new report has found.

The report says it is evidence of a “social failure at scale”. The Joseph Rowntree Foundation (JRF) says there has not been a sustained fall in poverty over the past 20 years.

It claims the number people considered to be living in very deep poverty has actually risen in that period. The JRF said six million people were in very deep poverty – households below 40% of the median income after housing costs.

It said this is 1.5 million more than two decades ago. Consumer champion Martin Lewis said the report must prompt policymakers and regulators to “sit up (and) take note”.

He said: “I warned at the start of the energy crisis that I was out of tools to help many on the lowest incomes. Now we have hit the stark reality that 100,000s of people in the UK, even after they’ve had professional help from money charities, are still deficit budgeting – so their income is less than their minimum necessary expenditure.

“Definitions of poverty are tricky, especially when based on relative incomes, but that smells like a clear indication the problem is getting worse. And, let’s be plain, once people are in the deepest mire, it’s not a Money Saving Expert you need, it’s policy makers and regulators to sit up, take note and address these deep rooted problems – which is exactly what I hope they do with this Joseph Rowntree Foundation report highlighting the situation and calling for change.”

JRF said its analysis, which looked at Government and Official National Statistics (ONS) data, showed that more than a fifth (22%) of people in the UK were living in poverty in 2021/22. This means around 14.4 million people in total, including 8.1 million working-age adults, 4.2 million children and 2.1 million pensioners were living in households below 60% of the median income after housing costs.

Around two in every 10 adults are in poverty in the UK, with about three in every ten children in poverty, the organisation said. Almost two-thirds (64%) of working-age adults in poverty live in working households, it added – a rise from 61% in 2020/21.

Around six million people in 2021/22 were said to be living in “very deep poverty”. This meant they had an average income 59% below the poverty line, the JRF said.

Giving the example of a couple with two children aged under 14 who are living in poverty, the JRF said its analysis suggested the average income for this family type after housing costs was £21,900 and they would need an extra £6,200 per year just to reach the poverty line. A family in that situation but living in very deep poverty had an average income after housing costs of £14,600 and would need around £12,800 on top of their existing income to reach the poverty line, JRF said.

Paul Kissack, JRF group chief executive, said: “It has been almost twenty years and six Prime Ministers since the last prolonged period of falling poverty in the UK. Instead, over the last two decades, we have seen poverty deepen, with more and more families falling further and further below the poverty line.

“Little wonder that the visceral signs of hardship and destitution are all around us – from rocketing use of foodbanks to growing numbers of homeless families. This is social failure at scale.

“It is a story of both moral and fiscal irresponsibility – an affront to the dignity of those living in hardship, while driving up pressures on public services like the NHS.”