What is poverty?

There is an ongoing debate about what ‘poverty’ means and how to measure it. However, most commentators agree that poverty needs to be understood in relation to typical living standards in society. Here is a widely-used definition from Professor Peter Townsend: [source] P Townsend, Poverty in the United Kingdom: a survey of household resources and standards of living, Penguin, 1979, p31

Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities, and have the living conditions and amenities which are customary, or are at least widely encouraged and approved, in the societies in which they belong.

Income poverty

A widely-used measure of poverty is where household income is below 60 per cent of the median UK income after housing costs have been paid. So-called income poverty rose in 2005/06 and 2006/07, but fell very slightly in 2007/08 (and rose after housing costs were accounted for), after having previously been on a downward trend for several years.

Every year the Government publishes a survey of income poverty in the UK, Households Below Average Income (HBAI). All the figures on this page are from the most recent HBAI survey in 2008/09 unless otherwise stated. HBAI includes figures before and after housing costs: we use the ‘after housing costs’ figures.

The HBAI survey shows that 13.4 million people in the UK (22%) are income poor.  Of those 13.4 million people:

• 53% are in households which include at least one child;
• 32% are in households of people of working age without children;
• 15% are in pensioner households.

People living below the poverty line are distributed around the UK as follows:

• England - 11,546,000, or 23% of the population;
• Scotland - 950,000, or 19% of the population;
• Wales - 667,000, or 23% of the population;
• Northern Ireland - 340,000, or 20% of the population.

The poverty line

The poverty line used here is 60 per cent of the median UK income after housing costs have been paid. Below this amount, a household is described as living in income poverty. The poverty line is adjusted to take into account how expenditure needs differ between types of households.

UK poverty line for a range of households, 2008/09

UK poverty line for a range of households, 2007/08

Household type	Poverty line: Household income, £ a week
Single person	£119
Couple	£206
Lone parent with two children (aged 5 and 14)	£247
Couple with two children (aged 5 and 14)	£333

What causes poverty?

The main cause of poverty is inadequate income, arising from worklessness, low wages and the low level of benefits.

Unemployment

In the three months to March 2009 statistics show unemployment averaging 7.3 per cent of adults of working age. The recession has led to a rapid increase in unemployment and this is expected to rise further. [source] Figures from National Statistics are to May 2009 The risk of not being in work is higher for those with low skills, from certain minority ethnic groups, and for those living in low employment areas. Other barriers to work include caring responsibilities and discrimination.

Low wages

Paid work is not, on its own, a guarantee of being free of poverty. In 2008/09, 61 per cent of income-poor children were in households where one or more parent was in work. Low wages, part-time work and not having two adults in work in a couple household all increase the risk of poverty.

Inadequate benefits

Benefits and tax credits, that are supposed to act as a safety net, are too low to protect families with children from poverty. Their value remains significantly below the poverty line.

Risk of income poverty, 1961 – 2008/09

[source] Institute for Fiscal Studies website www.ifs.org.uk

Who lives in poverty?

Some groups of people have a much greater than average risk of experiencing income poverty.

Risk of income poverty by household characteristics, 2008/09

The impact of poverty

Poverty makes people’s lives shorter and more brutal than they need to be. Poverty is not simply about being on a low income and going without – it is also about being denied power, respect, good health, education and housing, basic self-esteem and the ability to participate in social activities.

Poverty has costs to society as well as the individual. By limiting children’s educational attainment it reduces the skills available to employers, and impedes economic growth. For example a study by the Joseph Rowntree Foundation found that child poverty costs Britain at least £25 billion a year. [source] Estimating the Costs of Child Poverty, Joseph Rowntree Foundation, October 2008

Impact on education

On average poorer children score less well on a range of educational measures such as reading tests and GCSE results.

Pupils in England who score at or above level 2 for reading at Key Stage 1:

• Poorest tenth of areas – 73% of pupils
• Richest tenth – 93% of pupils.

Children who get 5 GCSEs at A*-C grade:

• Children eligible for free school meals – 35.5%
• Children not eligible for free school meals – 62.9%

[source] Department for Children, Schools and Families, National Curriculum Assessment, GCSE and Equivalent Attainment and Post-16 Attainment by Pupil Characteristics, in England 2006/07

Impact on health

Poverty is associated with a higher risk of both illness and premature death.

Life expectancy at birth varies significantly according to social class, with professional men expecting to live to around 80 years and unskilled manual men to 72.7 years, For women, the figures are 85.1 and 78.1 years. [source] Source figures are for England and Wales ‘Variations persist in life expectancy by social class’ October 2007

Poorer children on average experience poorer health during their childhoods and the effects of this last throughout their lives. Three-year-olds in households with incomes below about £10,000 are 2.5 times more likely to suffer chronic illness than children in households with incomes above £52,000. [source] Source data is from the millennium cohort study, see ‘Unhealthy Lives: Intergenerational links between child poverty and poor health in the UK’ End Child Poverty Campaign, 2008

The risk of infant mortality is higher for poor children.  In the lower social group (routine and manual occupations) infant mortality is 5.9 infant deaths per 1,000 live births. This is 20 per cent higher than the average 4.9 per 1,000. [source] Department of Health, 2007, Review of the health inequalities infant mortalities PSA target

Impact on social participation

Poverty isolates people, reducing their ability to engage in social and community life. In a study comparing the poorest and richest fifth of households, poorer children had fewer opportunities for activities and entertaining friends:

Table showing impact of poverty on social participation

Parents wanted but could not afford...	Poorest fifth	Richest fifth
a hobby or leisure activity for their children	15%	0%
to have friends round for tea or a snack once a fortnight	18%	0%
to send their children on a school trip at least once a term	12%	0%
to have a one-week holiday away from home with family	60%	4%

 

Make up of the poor population by economic status, 2008/09

Make up of the poor population by household status, 2008/09

How can we end child poverty?

‘Poverty’ is not a neutral term – it implies an unfair, unacceptable state about which something must be done. Nor is poverty ‘always with us’. It is higher in the UK than in comparable countries, which means we can be more effective in tackling it.

Poverty rates in the UK are driven by entrenched inequalities of income, wealth and power. Policy makers need to combat these inequalities in order to build a fairer and more sustainable future for the UK.

The child poverty pledge – reaching 2020

The Government has pledged to halve child poverty by 2010 and eradicate it by 2020. Although there has been some progress, policy is still off track and Budget 2010 did little to narrow the gap. We are widely expected to miss the 2010 mark by around 1 million children.

In the longer term more effort is needed to attain the 2020 goal and to help children thrive in childhood and in their later lives.

• Paid work is not a secure route out of poverty for many people, so improvements are needed in pay, access to childcare, and ensuring that parents can balance parenting and employment responsibilities. Bad and discriminating employers need to be tackled, and educational inequalities reduced to ensure that all children leave school well qualified to engage in the modern economy.
• Alongside ensuring that work works to tackle poverty, the state has a role in ensuring tax is fair and that we invest more in children through child benefit.  Tax credits and disability benefits need to be adequate and reach those who need them.
• Moves to improve family incomes and to narrow inequalities are crucial to break the damaging ‘chicken and egg’ cycle between educational inequality and poverty.

Child Poverty Action Group has suggested ten policy changes to help achieve this goal:

Ten steps from Ending Child Poverty: a manifesto for success

1. Protect jobs
2. Mend the safety net
3. Move away from means tests
4. Remove barriers to work
5. Stop in-work poverty
6. Put in place a child-first strategy for childcare
7. End the classroom divide
8. Provide fair public services for those who need them most
9. End poverty premiums in taxes and services
10. Ensure a decent home for every family

[source] Ending Child Poverty: A manifesto for success, Child Poverty Action Group, 2009

Further information

• To see the ten practical steps CPAG is calling for to end child poverty, see Ending Child Poverty: a manifesto for success
• For more on child poverty and education visit our campaign website 2 skint 4 school
• For further information and resources see the CPAG website
• Sign up to receive policy, campaigns and other news from CPAG by email
• The Child Poverty Toolkit, resources for local authorities and local campaigners
• The New Policy Institute’s Monitoring Poverty and Social Exclusion website
• The Joseph Rowntree Foundation website