Diving beneath the surface of poverty

When it comes to establishing how much of Britain’s population is under water, it’s essential to dive beneath the surface. That’s the first conclusion of Going without: deepening poverty in the UK, a comprehensive new JRF crunch of the UK’s poverty data.

Whether it’s soaring foodbank use, growing numbers of rough sleepers, or rates of malnutrition in hospitals, all manner of warning lights have been flashing. JRF’s own work shows the number of people unable to afford to eat, stay warm, dry, and keep clean has risen sharply, which also chimes with what people with experience of poverty tell us. Our new report set out to square all of this with a seeming puzzle – a mismatch between all of this and the headline poverty rate, which has moved precious little in recent times.

But dive deeper than the official measure of 60% of median income to a lower 40% of median measure, and you not only shift the focus to more acute hardship, but also reveal a very different trend. The total number of Britons below this benchmark shot up to reach 6.5 million on the eve of the pandemic (2019/20). This was an increase of more than a fifth over the best part of 20 years.

Needless to say, hardship is concentrated for some groups, and exploring which groups is the second way we look under the surface. One surprising finding was the prevalence of working poverty even at this very low income level: putting pensioners to one side, more than half of the people living in very deep poverty live in working families. The 2010s may have been a decade of rapid jobs growth, but work has not been the promised route out of poverty for many.

If most of the very poorest people live in working families, that is because most people work. Thinking about the risk, rather than the absolute number of people in very deep poverty, it is (unsurprisingly) greatly increased for workless families. The concentration of deep poverty among black and minority ethnic communities and disabled people is also striking; each of these will be the subject of separate JRF blogs.

While dismaying, some of these concentrations are hardly unexpected. But we also reveal how the face of very deep poverty has changed. Past progress in releasing lone-parents from hardship has gone into reverse. And in parallel, large families (three or more children)have been pulled in at the deep end. Putting these trends together, the upshot is that more children are growing up experiencing great hardship.

Focusing on people in large families, they now have a very deep poverty rate of 18%, compared to 11% for all families with children. That is a large differential and a new one: back in the early 2000s, the very deep poverty rate for larger families was itself just 11%. Although the share of the total population living in large families has declined during this century, the number of very poor people in them has doubled, to reach over a million.

The sense that there is an important and distinctive story here is reinforced by consideration of what happens when we home in on the very largest families, with four or more children. They are obviously fewer in number, accounting for just 4% of the population, but the very deep poverty rate for people in them is strikingly high, at 27%.

The social security system is a major part of the problem here. The two charts below show the breathing space above (or sinking space below) the very deep poverty line created by the basic benefit safety net, of Universal Credit and Child Benefit, for families of different sorts. Forget old notions of social security as doing away with poverty. The first thing to jump out from the chart is that several of these family types are not merely in poverty, but in very deep poverty. Moreover, the larger the family the greater the risk that needing to claim benefits lands them in this predicament. And these simplified graphs take no account of policies such as the household benefit cap, debt deductions or the inadequacies of housing or disability elements, which further reduce the money people actually receive, meaning the picture is very much worse in real life for many families.

Lone parents are just above the line when they’ve got up to three children, but sink under it when they have four. Current rates see workless couples pulled under it even with two children, but as the number of children rises, they sink even further away from it.

It almost looks as if policy were designed to make children born into larger families poorer. That might sound like a deliberate provocation but, sadly, it is uncomfortably close to the truth. A decade of cuts and freezes to social security have taken a particular toll for large families, the introduction of the benefit cap in 2013 (and its lowering in 2016) has hit them hard, and the two-child limit (introduced for children born after 2017) explicitly targets them. It is being phased-in, with a link to when children were born, meaning it bites harder every year. Absent a rethink, the remorseless logic of the two-child limit will be to continue to ratchet up poverty for some time to come.

The last, but not least, important way to dive beneath the surface on poverty is to think – really think – about what it involves. Naturally, the lower your income, the more likely it is you are being deprived of the bare essentials of life: heating, eating and keeping up with household bills. Our analysis finds striking concentrations of people going without. Returning to large families, they are twice as likely to be behind on their essential bills, living in a cold home, or not eating properly compared to people in smaller families with children. As surely as night follows day, the story of very low incomes translates into a story of real penury, where parents are having to skip meals so their children can eat, or finding that keeping warm today comes at the cost of the cold reality of future debts.

Across the population as a whole the official data on deprivation was showing some benign trends pre-pandemic. Back when energy prices would fall as often as they would rise, and in a pre-Covid and pre-Brexit world where cheap imports felt like a given, the effect of squeezed income on deprivation was mitigated by cheaper essentials. But as inflation approaches double digits, and the Government scrambles together emergency cost of living relief, it hardly needs saying that we are not in that world any more.

To fill the serious information gap created by the long time-lags in the production of official statistics, JRF very recently carried out a large survey of poorer Britons (incomes in the bottom 40%) in May and June this year - Not heating, eating or meeting bills: managing a cost of living crisis on a low income. It finds appallingly high levels of deprivation: 5.2 million low-income households (45%) had family members cut down on or skip meals, or go hungry because there wasn’t enough money for food in the month before the survey, 3.2 million (27%) had been unable to adequately heat their home since the start of the year, and 4.6 million (40%) were in arrears on at least one bill. Exactly the same groups that have been experiencing deepening poverty were particularly likely to go without.

Ultimately we need systems in place that provide a greater level of genuine security. This includes our social security system, which should be there for us when we need it, should we find ourselves sick, disabled, caring for others, looking for work or low paid. Instead, the erosion of social security has played a central role in the deepening poverty we track here. Without committed longer-term action, poverty will intensify further, and destitution will rise as a result. It’s urgent, and it’s morally wrong.

This is why, in the coming months and years, JRF will be doing more work to explore the drivers of deep poverty, as we begin to look at what it would take to ‘design-out’ destitution in the UK – redesigning systems so they don’t cause or perpetuate hardship. As we develop this work, we look forward to collaborating with people and organisations across the UK to further this mission.

Read the full report - Going without: deepening poverty in the UK.