Understanding Poverty in the UK

Key insights into current poverty trends and affected demographics

Poverty remains one of the most pressing social issues in the UK, affecting millions of people across the country. This blog presents a factual overview of current poverty statistics, highlighting key trends and the demographics most affected.

Defining and Measuring Poverty

In the UK, poverty is typically measured in two main ways: relative low income and absolute low income. Relative low income defines a household as in poverty if its income falls below 60% of the median household income, while absolute low income uses a fixed threshold that's adjusted for inflation over time.

These measures are calculated both before and after housing costs are taken into account, providing different perspectives on financial hardship across the country.

Current Poverty Rates

According to the Department for Work and Pensions (DWP) data for 2022/23, around one in six people in the UK were in relative low income before housing costs. This proportion rises to just over one in five people once housing costs are accounted for.

In numerical terms, this means 11.4 million people (17%) were in relative poverty before housing costs and 14.3 million (21%) after housing costs in 2022/23. For absolute poverty, the figures show 9.5 million people (14%) before housing costs and 12.0 million (18%) after housing costs.

Child Poverty

Children are particularly vulnerable to poverty in the UK. The statistics show that 3.2 million children (22%) were in relative poverty before housing costs and 4.3 million (30%) after housing costs in 2022/23.

This means that nearly one in three children in the UK lives in households considered to be in relative poverty after accounting for housing costs. Child poverty levels remain similar to pre-pandemic levels, according to the data.

Working-Age Adults

For working-age adults, the poverty figures for 2022/23 show 6.0 million (15%) in relative low income before housing costs and 8.1 million (20%) in relative low income after housing costs.

The absolute low income figures for working-age adults were 5.1 million (12%) before housing costs and 6.9 million (17%) after housing costs. These numbers show that a significant proportion of the working-age population continues to face financial hardship.

Family structure affects poverty risk significantly, with adults who have dependent children historically being more likely to experience poverty than childless working-age adults.

Recent Trends and Projections

Between 2021/22 and 2022/23, the overall poverty rates remained relatively stable, with no statistically significant changes reported in the DWP data. However, absolute low income increased by 500,000 people before housing costs and 600,000 people after housing costs in the year to 2022/23.

Looking ahead, the Resolution Foundation forecasted in September 2023 that absolute poverty will increase by 300,000 people, from 11.7 million in 2023/24 to 12.0 million in 2024/25, bringing the percentage of people in low income to 18.0% in 2024/25, the same rate as 2019/20.

The impact of these trends varies by demographic group. Absolute child poverty is forecast to rise most sharply, while absolute pensioner poverty is set to fall. Pensioners benefit from the State Pension triple lock and are less likely to be affected by rising housing costs.

Regional Variations

Though detailed regional breakdowns aren't fully captured in the available data, we know that poverty isn't evenly distributed across the UK. The highest deprivation levels are typically seen in the North, West Midlands, and Wales, according to geographical analyses of poverty.

This uneven distribution highlights the importance of targeted interventions that address the specific needs and challenges of different regions.

Conclusion

The statistics paint a clear picture of poverty in the UK: millions of people, including a significant proportion of children, continue to experience financial hardship. While some demographic groups show signs of improvement, others face increasing challenges.

Understanding these patterns is crucial for developing effective strategies to address poverty. Whether through targeted support for vulnerable groups, regional development initiatives, or broader economic policies, addressing poverty requires a multifaceted approach based on solid evidence.

For charities working in this space, these statistics can help inform service delivery, advocacy efforts, and fundraising strategies. By focusing on the areas and demographics with the greatest need, charitable organizations can maximize their impact and contribute to reducing poverty across the UK.