Poverty rates now higher than at any other time in the 21st Century

The Social Metrics Commission (SMC) has today published its fifth annual report assessing the level and nature of poverty across the UK. The report finds that the rate of poverty in the UK is now higher than at any point in the 21st Century.

• 16 million people in the UK are living in families in poverty.
• 5.2 million are children, 9.2 million are working-age adults and 1.5 million are pension-age adults.
• Nearly one in four (24%) people in the UK now judged to be in poverty.

The report also echoes last year’s findings which demonstrated that children have been particularly hard hit. More than a third of all children (36%) were in poverty in 2022/23 (the time period covered by the report), which is an almost five percentage-point increase since 2019/20 and the highest of any group. Overall, poverty rates have risen by two percentage points since 2019/20, which means that 2.1 million more people are now living in poverty than would have been the case if this rise had not happened.

The SMC data is published ahead of the Poverty Strategy Commission’s forthcoming final report, which is expected early in 2025. This will show how, by using the analysis laid out by the SMC’s approach, a strategic approach to tackling poverty can bring about a significant and sustainable reduction in poverty in the UK – for people of all ages.

A new approach is urgently needed. Today’s SMC data publication follows the release of the Government’s first strategy paper on how it intends to tackle poverty amongst children and shows the scale of the challenge that this represents.[1] It also follows research showing that more than half of the public (52%) think that poverty will rise over the course of the Parliament.[2]

The number of disabled people in poverty has also increased significantly. In 2022/23, there were 8.7 million people in poverty who are disabled themselves, or who live with a disabled person, up from 6.9 million in 2019/20. Today, well over half of people in poverty in the UK (54%) live in a family that includes a disabled person.

However, poverty rates for some groups have fallen: poverty rates for pension-age adults are down by nearly seven percentage points, from 20% in 2000/01 to 13% in 2022/23. Poverty rates for lone-parent families have fallen by three percentage-points to 55% in 2022/33.

Other findings include that:

• Rises in poverty overall have not translated into further rises in deep poverty. The number of people in deep poverty remains slightly below that seen pre-pandemic. Compared to 2019/20, there are 100,000 fewer people in deep poverty in 2022/23.
• Work provides an effective protection from poverty, with poverty rates for those in workless families having risen rapidly since the pandemic. The poverty rate for workless families fell to a low of 68% in 2019/20, however it has risen by seven percentage points to 75% since then. In contrast, just 10% of people living in households where all adults work full time are in poverty.
• However, the majority of people in poverty in the UK today live in a family where someone works at least part time (62%), with three in ten (29%) in working-age, workless families, with the difference made up by families in which all adults are retired (7%).

The report also finds that those in poverty are more likely to have poor self-reported mental health. One in three (33%) people in poverty live in a family that includes someone with poor self-reported mental health, compared to 24% of people who are not in poverty. 15% of people in poverty live in a family that includes someone who reports low life satisfaction, compared to 9% of those who are not in poverty.

Those in poverty are, perhaps unsurprisingly, significantly more likely to face severe strain in budgeting and paying their bills. Over a quarter (26%) of people in poverty are in families that are behind in paying their bills, compared to only 6% of people who are not in poverty. More than two-thirds (68%) of people in poverty live in a family in which no adult saves, compared to a third (36%) of people who are not in poverty.

Baroness Philippa Stroud, CEO of the Centre for Social Policy Studies and Chair of the Social Metrics Commission said:

“Whilst this report shows that poverty rates are now higher than at any point this Century, they have never fallen below 21% over that same timeframe.

“This shows the real challenge facing us all in ensuring that we move the dial on poverty in the UK and ensure that as many people as possible can enjoy a life free of poverty.

“My hope is that people and organisations across society can come together to work with governments of all levels to develop a strategy that can be successful in delivering a significant and sustained reduction in poverty.

“This must be underpinned by data and analysis that accurately demonstrate the scale and nature of poverty in the UK – and that’s why this report – and the Government’s work on its own Below Average Resources measure of poverty is so important. Without effective measurement – we cannot hope to tackle poverty”

Notes to editors:

The Department for Work and Pension’s has now released its first set of official statistics in development based on the SMC’s approach. When fully developed, this new Below Average Resources measure of poverty will also support policymakers, businesses, civil society and individuals to tackle poverty.

The report can be found online here.

About the Social Metrics Commission

The Social Metrics Commission is an independent Commission formed and led by the Centre for Social Policy’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 Centre for Social Policy Studies. The Commission has been generously supported by the Joseph Rowntree Foundation, Calouste Gulbenkian Foundation (UK Branch), Garfield Weston Foundation, Oliver Wyman, Jon Moulton and Stuart Roden.

At the time of the Commission’s landmark 2018 report, the Commission was made up of 15 Commissioners:

• Baroness Philippa Stroud (Chair), Centre for Social Policy Change
• Helen Barnard, The Trussell Trust
• Dr Stephen Brien, Social Security Advisory Committee
• 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, Sutton Trust
• Oliver Hilbery, Making Every Adult Matter
• David Hutchison OBE, Social Finance
• Robert Joyce, Alma Economics
• 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.

(2) Providing a better understanding of the nature of poverty, by presenting detailed analysis of poverty depth and persistence for those in poverty; and

(3) 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.

[1] Tackling Child Poverty: Developing Our Strategy (HTML) – GOV.UK (www.gov.uk)

[2] Half of public expect poverty and wealth gap to grow under government’s first term, study finds | King’s College London (kcl.ac.uk)