JRF: Record number of people in poverty living in working households

Office workers - PA

The number of people struggling below the breadline despite living in working households has hit record levels, a damning new report has claimed.

According to the New Policy Institute, some 55 per cent of people in poverty in the UK are living in working households - including millions of children.

Its report says in-work poverty has increased by 1.1m people since the economic recovery began, with the rise driven by the crisis in housing, including the challenging rental sector.

The Joseph Rowntree Foundation, which commissioned the report, said the UK economy was “not working” for low-income families, and called on the Government to reverse welfare cuts.

The annual Monitoring Poverty and Social Exclusion report said 13.5m people, amounting to 21 per cent of the UK population, is now living in poverty.

Of those, 7.4m, including one in every eight workers and 2.6m children, were living in a working family.

The report also said the number of people living in poverty in the private rented sector had doubled in a decade to 2.5m households, while half of children living in rented accommodation, including social housing, were in poverty.

The report added that the economic recovery had helped stem soaring poverty rates - but warned of “growing insecurity beneath positive economic headlines”.

Helen Barnard, head of analysis at the JRF, said: “The UK economy is not working for low-income families.

“The economy has been growing since 2010 but during this time high rents, low wages and cuts to working-age benefits mean that many families, including working households, have actually seen their risk of poverty grow.”

The JRF called on the Government to end the freeze on working age benefits, reverse cuts to the amount people can earn before they see their benefits diminished and invest in a £1.1bn ‘living rents’ housing scheme.

Shadow Work and Pensions Secretary Debbie Abrahams said the report showed the “true impact of six wasted years of Tory austerity”.

“This Government has no plan to tackle stagnant wages and rising insecurity, choosing instead to make the poorest pay for their economic mismanagement,” she said.

“Only a Labour government will introduce a real Living Wage based on what people need. We will also ensure that work will always pay under Universal Credit, to put an end to in-work poverty.”

Responding to the report, TUC general secretary Frances O’Grady lamented the dramatic fall in wages after the financial crisis.

She added: “It’s time for employers to give their staff fair pay and decent hours, while the Government should lift the public sector pay cap and invest in our economy.”