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The new report from the Social Metrics Commission emphasises the importance of looking beyond headline numbers of people in poverty to better understand the nature of that poverty, and provides a baseline to help understand the potential impacts of the COVID-19 crisis.

Latest report on UK poverty from Social Metrics Commission highlights 39% rise in deep poverty since 2000 - and says figure may increase further as result of coronavirus

A new report published today by the Social Metrics Commission (SMC) highlights that although the poverty rate in the UK has remained largely unchanged over the last 20 years, there has been a significant increase in the proportion of people living in deep poverty – that is, more than 50% below the poverty line. The report also warns that it is those in deep poverty who are being most significantly impacted by the coronavirus.

The report reveals that:

  • Before the coronavirus pandemic struck, there were 4.5 million people (7% of the UK population) living in deep poverty, up from 2.8 million (5% of the population) two decades ago.
  • This is in contrast to the overall rate of poverty, which has changed relatively little over the same period (decreasing from 23% in 2000/01 to 22% in the latest figures).

The report emphasises the importance of looking beyond headline numbers of people in poverty to understand the nature of that poverty, and provides a baseline to help understand the potential impacts of the COVID-19 crisis. YouGov survey data included in the report reveals that those living in deep poverty before the pandemic have experienced the largest changes in employment since then:

  • Two in three (65%) of those employed and in deep poverty prior to the crisis have seen reduced hours or earnings, been furloughed, and/or lost their job. This compares to one in three (35%) of those employed and living in families more than 20% above the poverty line prior to the crisis.
  • More than a third (36%) of those in deep poverty have had their hours or pay reduced as a result of the crisis, compared to less than a quarter (22%) of those living more than 20% above the poverty line.

The results show that others living in poverty or just above the poverty line have also been impacted by the crisis. Nearly one in eight (12%) of this group who were previously employed say they have been made unemployed as a result of the crisis, compared to fewer than one in ten (7%) of those living more than 20% above the poverty line.

Together, these impacts on those already in poverty and just above the poverty line threaten to increase the number of people in poverty and deepen poverty for those already experiencing it.

The report also shows that:

  • Families in poverty where the adults work full time are less likely to experience deep poverty. Nearly one in five (19%) of those in poverty in full-time work families are in deep poverty, compared to over four in ten (43%) of those in poverty in part-time work families and half (50%) of those in poverty in workless families.
  • If the rate of deep poverty was the same today as it was in 2000/01, 1.3 million fewer people would now be in deep poverty.

Philippa Stroud, Chair of the SMC and CEO of the Legatum Institute, commented: “It is extremely concerning that the proportion of people experiencing deep poverty has risen since the millennium, through Governments of all colour,  and is likely to continue to increase as the country struggles with the ongoing effects of the coronavirus pandemic.”

“Our analysis indicates a picture where, over the last 20 years, rising employment rates for those in poverty were helping families move out of deep poverty, so they were more likely to be able to escape poverty in the future. A reversal of this employment success story will likely lead to many of those already experiencing poverty moving into deeper poverty. Supporting employment, especially for those on the lowest incomes, must remain a key priority of Government.”

“The SMC’s analysis of those in deep poverty also demonstrates the importance of looking beyond previous headline poverty measures to ensure that all those living in poverty are not viewed as a single group. Poverty is more likely to be experienced by some families than others, and the nature of that experience is also incredibly varied. The causes and implications of these various types and experiences of poverty are different, which means the approach needed to tackle them will be different.”

More on the Commission’s report

The SMC’s 2020 report uses the latest data to assess the extent and nature of poverty across the UK and how it has changed since 2000/01, based on its new measurement approach. The Government is currently developing experimental national statistics based on the SMC’s approach, as the first step towards adopting it as an official measure.

The report reveals that, prior to the COVID-19 crisis:

  • The overall rate of poverty in the UK was 22%. There were 14.4 million people living in poverty. This included 4.5 million children; 8.5 million working-age adults; and 1.3 million pension-age adults.
  • Half (50%) of all people in poverty lived in a family that included a disabled person. There were 4 million people in poverty who were themselves disabled and another 3.2 million lived in a family that included someone else who is disabled.
  • Poverty rates were highest amongst families with children. The poverty rate for people living in couple families without children was 11% (1.4 million people), compared to 26% (5.9 million people) for people in couple families with children and 48% (2.4 million people) for those in lone-parent families.
  • Poverty rates were higher for Black and Minority Ethnic families. Nearly half (46%, 900,000 people) of all people living in families where the household head is Black/African/Caribbean/Black British were in poverty, compared to just under one in five (19%, 10.7 million people) of those living in families where the head of household is White.
  • Poverty rates varied slightly across the UK’s four nations. The highest poverty rate was 23% in Wales, compared to 22% in England, 21% in Northern Ireland, and 19% in Scotland.
  • Poverty rates varied significantly between English regions. Poverty rates were highest in London (29%) and the North East (26%), and lowest in the South West, South East, and East of England (all 18%).
RegionTotal number of people in povertyWorking-age adults in povertyChildren in povertyPension-age adults in poverty
North East700,000 (26%)400,000 (26%)200,000 (39%)100,000 (11%)
North West1,700,000 (23%)1,000,000 (22%)500,000 (35%)200,000 (13%)
Yorkshire & Humber1,300,000 (24%)800,000 (24%)400,000 (35%)100,000 (11%)
East Midlands900,000 (19%)500,000 (19%)300,000 (29%)100,000 (9%)
West Midlands1,400,000 (24%)800,000 (23%)500,000 (37%)100,000 (12%)
East of England1,100,000 (18%)600,000 (18%)400,000 (28%)100,000 (9%)
London2,500,000 (29%)1,500,000 (26%)800,000 (43%)200,000 (18%)
South East1,600,000 (18%)1,000,000 (18%)500,000 (27%)100,000 (8%)
South West1,000,000 (18%)600,000 (18%)300,000 (28%)100,000 (8%)
England12,100,000 (22%)7,100,000 (21%)3,900,000 (33%)1,100,000 (11%)
Northern Ireland400,000 (21%)200,000 (21%)100,000 (29%) *
Wales700,000 (23%)400,000 (23%)200,000 (31%)100,000 (14%)
Scotland1,000,000 (19%)700,000 (20%)300,000 (27%)100,000 (10%)
UK14,400,000 (22%)8,500,000 (22%)4,500,000 (33%)1,300,000 (11%)

* indicates data not available as less than 50,000 people.

Notes: Figures have been rounded, so may not sum perfectly.

However, the report also shows that there have been some positive changes in recent years, including a closing of the resilience gap between those in poverty and those not in poverty in some areas:

  • After rising for the last three years, the most recent data shows that the poverty rate for children and pension-age adults has plateaued at 33% and 11% respectively.
  • The proportion of people in poverty who live in lone-parent or single-pensioner families has fallen from 24% and 7% respectively in 2000/01 to 17% and 5%.
  • The poverty rate for families that include a disabled child has fallen from 46% in 2008/09 to 34%.
  • The proportion of people in poverty who are also in persistent poverty has fallen for all age groups since 2014.
  • Fewer people in poverty live in families where someone feels unsafe walking alone at night (29%, down from 35% in 2011/12).
  • Fewer people in poverty live in families where someone worries about being affected by crime (50%, down from 54% in 2011/12).

However, the SMC’s Lived Experience Indicators show that those in poverty still experience worse outcomes than those not in poverty:

  • One in five (20%) people in poverty live in families where no one has any formal qualifications, compared to less than one in ten (8%) of those in families not in poverty.
  • Nearly three in ten (27%) people in poverty live in a family that is behind with paying bills, compared to less than one in ten (7%) of those not in poverty.
  • The majority of people in poverty (70%) live in families where no-ones saves, nearly double the proportion of those not in poverty (38%).

Philippa Stroud continued: “When Commissioners first gathered in 2016 to begin to develop a new measure of poverty, we could never have anticipated that our third annual report would be released amidst the most significant health, social, and economic crisis of modern times. However, the need for robust and agreed poverty measures is arguably greater than ever, so that the Government can develop a clear anti-poverty strategy and others can hold it to account.”

“Measuring poverty is essential if the UK is to take action to improve the lives of those currently experiencing it or who, without action, would otherwise be in poverty in the future. With the economic and social impacts of the coronavirus likely to last long after the health crisis is over, these results show how far we have to go to improve the lives of the most disadvantaged in society. The Commission’s work is only the start of what needs to happen. Policymakers, business leaders, researchers, community builders and those in poverty all have a part to play. By working together, we can ensure that poverty is less of an issue in the UK after the coronavirus crisis than it was before, and that as many people as possible can enjoy a life free of poverty.”

 

About the Social Metrics Commission

The Social Metrics Commission is an independent Commission formed and led by the Legatum Institute’s CEO Baroness Stroud. It is independent and rigorously non-partisan, and is dedicated to helping policymakers and the public understand and take action to tackle poverty. Its goal has been to develop new poverty metrics for the UK which have both long-term political support and effectively identify those who are in poverty. By doing so, it hopes that Government and others will be better able to develop interventions that reduce the number of people experiencing poverty and improve outcomes for those people who do experience it.

The Commission is hosted by the Legatum Institute, which makes available the resource of its Centre for Metrics, and is supported by the Legatum Institute Foundation. The Commission’s work would not be possible without that support, and the research, editorial and functional independence that has underpinned it. The Commission has also been generously supported by the Joseph Rowntree Foundation, Calouste Gulbenkian Foundation (UK Branch), Garfield Weston Trust, Oliver Wyman, PF Charitable Trust and Mr Sanjit and Mrs Sangeeta Talukdar.

The Commission is made up of 15 Commissioners:

  • Philippa Stroud (Chair), Legatum Institute
  • Helen Barnard, Joseph Rowntree Foundation
  • Dr Stephen Brien, Legatum Institute
  • Prof Leon Feinstein, University of Oxford
  • Deven Ghelani, Policy in Practice
  • Prof Paul Gregg, University of Bath
  • Dr David Halpern, Behavioural Insights Team
  • Dr Nick Harrison, MATCHESFASHION
  • Oliver Hilbery, Making Every Adult Matter
  • David Hutchison OBE, Social Finance
  • Robert Joyce, Institute for Fiscal Studies
  • Carey Oppenheim, London School of Economics
  • Rt Hon David Laws, Education Policy Institute
  • Hetan Shah, British Academy
  • Stephan Shakespeare, YouGov

About the SMC’s poverty measure

The Social Metrics Commission was founded in 2016 to develop a new approach to poverty measurement. In response to the fact that the UK no longer had an official measure of poverty for children, adults or pensioners, its ambition was to develop metrics that both better reflected the nature and experiences of poverty that different families in the UK have, and which could be used to build a consensus around poverty measurement and action in the UK.

Following two and half years of work, the Commission published its first report in September 2018. This articulated how the approach to poverty measurement could be improved in the UK and elsewhere. The Commission’s measure included improvements in three key areas:

  1. Identifying those least able to make ends meet. The Commission’s measure:
    • Accounted for all material resources, not just incomes. For instance, this meant including an assessment of the available liquid assets that families have;
    • Accounted for the inescapable costs that some families face, which make them more likely than others to experience poverty. These include, the extra costs of disability, costs of childcare and rental and mortgage costs; and
    • Broadened the approach of poverty measurement to include an assessment of overcrowding in housing and those sleeping rough.
  1. Providing a better understanding of the nature of poverty, by presenting detailed analysis of poverty depth and persistence for those in poverty; and
  1. Providing an assessment of Lived Experience Indicators that shine a light on the differences in experiences of those living in poverty and those above the poverty line.

The Commission’s 2018 report was the first time this framework had been used to present a detailed articulation of the nature of poverty in the UK. The Commission’s findings suggested that the same number of people were in poverty in the UK as previously thought. However, within this overall population, the Commission’s results suggested significant changes to the groups identified as being in poverty and also shed greater light on the depth, persistence and Lived Experiences of poverty.

Data sources

All data for the 2020 Social Metrics Commission report is drawn from the following sources:

  • Department for Work and Pensions, Office for National Statistics, NatCen Social Research. (2020). Family Resources Survey, 2018-2019. [data collection]. UK Data Service. SN: 8633, http://doi.org/10.5255/UKDA-SN-8633-1.
  • Department for Work and Pensions. (2020). Households Below Average Income, 1994/95-2018/19. [data collection]. 14th Edition. UK Data Service. SN: 5828, http://doi.org/10.5255/UKDA-SN-5828-12.
  • University of Essex, Institute for Social and Economic Research. (2020). Understanding Society: Waves 1-9, 2009-2018 and Harmonised BHPS: Waves 1-18, 1991-2009: Special Licence Access. [data collection]. 11th Edition. UK Data Service. SN: 6931, http://doi.org/10.5255/UKDA-SN-6931-10.

All figures from polling, unless otherwise stated, are from YouGov Plc. Total sample size was 84,520 adults. Fieldwork was undertaken between 25th March and 18th May 2020. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). After accounting for missing data on income, household size and economic status, all results use answers from 77,668 adults.