News Article

Over six million people in working households in poverty

Published 26 November 2012 by

6.1 million people in working UK households are in poverty. That's according to the annual Monitoring Poverty report from the Joseph Rowntree Foundation (JFR).

Not taking pensioners into account, this means that the number of working people in poverty exceeds the 5.1 million Britons who are in workless households in poverty.

The report, authored by the New Policy Institute (NPI), found that underemployment - people who lack the level of work they want - currently affects 6.5 million. For example, the number of people in part-time work but wanting full-time employment has increased by 500,000 since 2009 to 1.4 million today.

Since 2003, the number of working families who receive working tax credits to top up their wages has grown by 50% - reaching the 3.3 million mark in 2012. Furthermore, 4.4 million jobs pay less than £7 per hour, with low-paid work apparently widespread in job areas including retail, transport and hotels & restaurants.

The findings suggest that while 18% of people are on a low income at any one time, a third (33%) had at least one low-paid period in a four-year timeframe - and 11% are in low income for more than half that time.

The report indicates that many people move in and out of poverty as their working situation changes. Nearly 5 million people - equivalent to one in six people who are economically active - have claimed jobseeker's allowance (JSA) at least once in the last two years.

Recent benefit cuts have also resulted in lower incomes for many cash-strapped households across the country, with large numbers of the worst-off families hit by a combination of cuts.

Julia Unwin, Chief Executive of JRF, said: "The most distinctive characteristic of poverty today is the very high number of working people who are also poor. Many more people have experienced poverty since the downturn, cycling in and out of insecure, short-term and poorly paid jobs."

A spokesperson for thinkmoney commented: "Many households are struggling more than ever to make ends meet in the current climate. For people on low incomes, it's crucial that they can budget for all their monthly essentials, including rent/mortgage, food and energy bills.

"There are ways people could avoid financial problems and keep on top of their important monthly costs. The thinkmoney Personal Account, for example, is an alternative to a bank account, designed to help people budget for their bills and other costs. It comes with a Money Manager service, which means the money you need for your essentials will be set aside each month, so you can be sure you won't ever accidentally spend the money you really need."

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