|Date:||19 July 2016|
|Authors:||Chris Belfield , Jonathan Cribb , Andrew Hood and Robert Joyce|
Recent years have seen a truly remarkable transformation in patterns of low income in the UK. One great success is that pensioner incomes have grown so much and, after housing costs, they are now the least likely major demographic group to be in income poverty. Another is that more people are in work than ever before. The proportion of children living in a household where no-one works has fallen from nearly one in four in 1994–95 to less than one in six in 2014–15.
The “new poor” tend to live in households where there is someone in work. Only a third of children below the government’s absolute poverty line now live in a workless household – two thirds of those classified as poor are poor despite the fact that at least one of their parents is in work. So if the new Prime Minister takes forward the ‘life chances’ strategy started by her predecessor, that strategy needs to focus on lifting the incomes of working households.
These are among the findings of a new report by IFS researchers published today: Living Standards, Poverty and Inequality in the UK: 2016, funded by the Joseph Rowntree Foundation. The research uses data on household incomes from the government’s Households Below Average Income series, recently made available up to and including the financial year 2014–15.
The falls in household worklessness have important implications:
Other key findings include:
Robert Joyce, an author of the report and an Associate Director at IFS said:
“Tackling low income is increasingly about tackling the problems faced by low-earning working households. In the short term this would be aided by a continued recovery in the number of hours worked by those on low wages or by more second earners entering work. Ultimately substantial progress will depend crucially on economic policies that push up productivity. Economic uncertainty following the Brexit vote will only serve to make these challenges all the tougher”.
Andrew Hood, an author of the report and a Research Economist at IFS said:
“Given the economic recovery and cuts to benefits over the last few years we might have expected inequality to rise. But the combination of strong employment growth, some earnings growth for low-paid workers, and a lack of earnings growth for others, has kept inequality below its pre-recession level”.
Notes to Editors:
1. For embargoed copies of the “Living Standards, Poverty and Inequality in the UK: 2016” report or other queries, contact: Bonnie Brimstone or Emma Hyman at IFS: 020 7291 4800 / 07730 667 013, firstname.lastname@example.org, email@example.com;
2. This report will go live on the IFS website at 00.01 Tuesday 19 July. Authors will then present the findings at a launch event at 10am: http://www.ifs.org.uk/events/1320. To reserve your place, please complete a booking form: http://www.ifs.org.uk/events/booking
3. The Joseph Rowntree Foundation is an independent organisation working to inspire social change through research, policy and practice. For more information visit www.jrf.org.uk JRF is on Twitter. Keep up to date with news and comments @jrf_uk. For press releases, blogs and responses follow@jrfmedia