JRF report reveals first sustained hikes in child and OAP poverty for 20 years

A “turning point” has been reached in the fight against poverty following the first sustained increases in child and pensioner poverty for 20 years, according to a new report.

The Joseph Rowntree Foundation (JRF) said almost 400,000 more children and 300,000 more pensioners are living in poverty than four years ago, with little progress in reducing poverty among working age adults.

Its state of the nation report said poverty rates increased last year, leaving 14 million people living in poverty, including four million children and 1.9 million pensioners.

New threats are emerging to the poorest households, including rising housing costs, higher food and energy bills, debts and not being able to contribute to a pension, said the social research group.

The findings come just a day after Alan Milburn, the head of the the Social Mobility Commission, resigned, together with three other board members, in protest the at the Government’s lack of progress towards building a “fairer Britain”.

The Government was urged to end the four-year freeze on working age benefits and tax credits and to invest in a more ambitious housebuilding programme to provide genuinely affordable homes to rent and buy.

Campbell Robb (pictured), chief executive of the JRF, said: “These worrying figures suggest that we are at a turning point in our fight against poverty.

“Political choices, wage stagnation and economic uncertainty mean that hundreds of thousands more people are now struggling to make ends meet. This is a very real warning sign that our hard-fought progress is in peril.

“Action to tackle child and pensioner poverty has provided millions of families with better living standards and financial security.

“Record employment is not leading to lower poverty, changes to benefits and tax credits are reducing incomes and crippling costs are squeezing budgets to breaking point.

“The Budget offered little to ease the strain and put low income households’ finances on a firmer footing.

“As we prepare to leave the EU, we have to make sure that our country and our economy works for everyone and doesn’t leave even more people behind.”

The report said: “The prospects for solving UK poverty are worrying. The continuing rise in employment is no longer leading to lower poverty. Changes to benefits and tax credits for working-age families are reducing the incomes of many of those on low incomes.

“High housing costs continue to reduce the incomes available for those in poverty to meet other needs. Inflation is rising and is higher for those on lower incomes than for better-off groups. This squeeze on living standards is also storing up problems for the future.

“Most people on low incomes have no savings and are not building up a pension. The decreasing proportion of the working-age population buying their own home means that in the future more older people are likely to rent and have higher housing costs in retirement.”

The poverty indicator used in the report is when a family has an income of less than 60% of median income after housing costs.

Alison Garnham, chief executive of Child Poverty Action, said: “As today’s report shows, we know how to reduce child poverty in the UK – we’ve done it before.

“Yet at the start of a sustained rise in the rate of child poverty – bewilderingly – there is inaction. The question the report begs is why are we not investing in our children?

“Families with children have had a decade of cuts to their incomes and the damage is showing. Unless there is action now to protect the living standards of low-income families, we will pile up problems for future generations and for the UK economy.”

A Government spokesman said: “We are spending an extra £4.2 billion on pensioners, carers and disabled people next year, and continue to spend around £90 billion a year supporting people of working age, including those who are out of work or on a low income.

“Since 2010, the number of people in absolute poverty has fallen by over half a million, pensioner poverty remains close to historically low levels and we are supporting parents with the cost of bringing up children by doubling free childcare.

“We have given the lowest earners a significant pay rise through the National Living Wage, and are introducing Universal Credit to make sure it pays to be in work.”

Debbie Abrahams, shadow work and pensions secretary, said: “A 700,000 increase in the number of children and older people in poverty is totally unacceptable.

“The last seven years of flat-lining wages and austerity cuts, now combined with sharply rising costs of household essentials is a truly terrifying prospect for millions trying to make ends meet.

“The cuts to Universal Credit, which were not addressed in the recent Budget and mean that ‘work does not always pay’, will push even more children and working age adults into poverty.”

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