Working family poverty hits a record high

According to a report from the think tank IPPR, the UK’s relative poverty rate among working households has hit a record high this century of 17.4 per cent, according to the first comprehensive analysis of official data released last month. Working poverty rates among families with three or more children have reached 42 per cent, up more than two thirds over the past decade.

The figures, reflecting the position just before the pandemic struck, show that working poverty rates have risen across the entire country but are highest in London, Wales and the north of England. Families of all sizes have been affected, with single parents, couples with a single earner and large families affected worst.

The sharp rise in working poverty (poverty faced by anyone living in a household where someone is in work) is revealed in the report, No Longer Managing, which lists four factors behind the growth in poverty: spiralling housing costs among low-income households; low wages; a social security system that has failed to keep up with rental costs; and a lack of flexible and affordable childcare.

It identifies the economy’s over-dependence on house price growth as a key factor in driving poverty higher, as more families have to rely on renting privately and housing costs for private tenants have risen by almost half (48 per cent) in real terms over 25 years. One in four households is projected to be renting from private landlords by 2025.

As a result, it says, much of the multi-billion pound benefits bill supports housing costs in the private sector, with any increase effectively channelled into the pockets of private landlords. IPPR estimates that £11.1 billion of housing support spending went to private landlords last year.

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