INSPIRING SOCIAL CHANGE

Poverty in the UK Chris Goulden Policy & Research 28 November 2013

JRF publishes an annual review of progress made in fighting poverty and other forms of exclusion in the UK Range of indicators from low income & worklessness to ill health and homelessness Uses official statistics & datasets – retrospective 2013 report due out on Sunday 8 December Monitoring Coalition’s agenda on poverty and exclusion Monitoring Poverty & Social Exclusion Background

Monitoring Poverty & Social Exclusion What I’m talking about… Poverty and incomes  different risks by age group Employment and low pay Impacts of welfare reform

Poverty and incomes In 2011/12, 13 million people living in poverty in the UK  For the first time, more than half in a working family Pensioner poverty is at its lowest for almost 30 years  For working-age adults without children, poverty is the highest on record Average incomes have fallen by 8% since their 2008 peak  2m people have household incomes below the 2008 poverty line but not considered to be in poverty today Monitoring Poverty & Social Exclusion

Employment and low pay Labour market showing signs of revival  Underemployment fallen slightly to 6.3m  Young adult unemployment peaked at 21% More people in low-paid jobs  Around 5 million people paid below the Living Wage Churn in and out of work is substantial  4.8m different people have claimed JSA in last 2 years Monitoring Poverty & Social Exclusion

Social security Reduction in incomes for many on means-tested benefits  Doubling of sanctioned jobseekers to 800,000  Cuts big and small erode benefits  Affecting those in and out of work Benefits for an out-of-work adult without children are 40% of what the public say is a minimum standard of living  Families with children = 60% National averages mask huge variations between areas in  Unemployment  FSM and educational achievement  Life expectancy Monitoring Poverty & Social Exclusion

DateChangeNumbers affected Average weekly loss Jan 2012Under 35s only eligible for shared room rate of HB62,500£41 April 2012Couples with children need to work 24hrs with at least one working 16hrs to qualify for working tax credits 212k familiesUp to £75 May 2012One year limit on contributory ESA700k by 2015/16 £36 April 2013Under-occupancy penalty660k£14 April 2013LHA uprated by CPI rather than rents1.39m LHA claimants Notional loss April 2013CTB replaced by CTS2.4m£2.65 April 2013DLA replaced by PIP450k lose by 2018 Avg DLA £78 April 2013Benefits updated by 1% only9.6m£3 April 2013Overall benefit cap40k h/holds£62 median Welfare changes since 2012

Monitoring Poverty & Social Exclusion

Conclusions The Good Unemployment and underemployment falling Headline poverty measure down Improving educational attainment (but a fixed gap) The Bad The fall in poverty has to be qualified  2 years of falling average incomes (and poverty line)  Many worse off than 5 years ago  Since 2011/12, further falls in real wages and the real value of benefits Monitoring Poverty & Social Exclusion

Conclusions The Ugly Poverty is broader and, for some, more severe  More now living on incomes below the value of out-of- work benefits (far lower than the poverty line)  More jobseekers being sanctioned  Private renters facing stricter caps on LHA  Social renters paying under-occupancy penalty  Low-income families paying Council Tax Welfare reform is by no means the solution to poverty but current changes are making poverty worse Positive labour market developments do not ‘balance’ the squeeze on incomes of the poorest Monitoring Poverty & Social Exclusion