UK Gov’s poverty stats 2020–2021: A cause for celebration?
The Department for Work and Pensions (DWP) has published its annual poverty stats for April 2020 to April 2021. Headline figures show that rates of relative and absolute poverty decreased over the first year of the COVID-19 pandemic. While this is a cause for celebration, these stats fail to tell the whole story of poverty during this time, and the subsequent reverse in progress from April 2021. This blog delves beyond the headline stats to reveal a more detailed picture of UK poverty.
What are the DWP’s primary metrics?
The DWP uses household surveys to measure poverty in terms of disposable household income. The primary measures include:
- Absolute poverty — Those living in households where income is below 60% of the UK median income in 2011 (adjusted for inflation) to allow for comparison to a fixed standard.
- Relative poverty — Those living in households where income is below 60% of UK median income in that year to allow for changing national standards over time.
Absolute and relative poverty are measured both before and after housing costs. After housing costs, rates of poverty are generally higher and this blog uses these figures in order to best reflect the everyday costs faced by households.
What were DWP’s headline stats for 2020–2021?
The Government’s proudest stat in the report showed that the proportion of individuals in absolute low income decreased from 18% (11.7 million people) in April 2020 to 17% (11.1 million people) in April 2021. Rates of relative poverty also showed a slight decline over the same period.
This means an estimated 600,000 individuals were pulled above the poverty line. The decrease is largely attributed to the Government’s COVID support measures for those on low incomes. Most notably, Universal Credit (UC) and Working Tax claimants received a temporary £20 weekly uplift from April 2020. This points to the crucial role that Government social security can play in tackling poverty.
What do these stats fail to reveal?
While relative and absolute poverty decreased over the first year of the pandemic, these stats don’t tell the whole story. Families already in poverty, and deep poverty (more than 50% below the poverty line), experienced an increase in hardship.
The impact of the pandemic was particularly notable amongst working age families already experiencing poverty. Individuals already in deep poverty, for instance, were 15% more likely to have lost their job, been furloughed or experienced reduced hours than individuals living more than 20% above the poverty line.
The economic fallout was also particularly notable amongst already over-represented groups in poverty, including individuals with disabilities, those from Black and Asian minorities and families with children. So while Government support measures helped to curb overall increases in poverty, they failed to do enough to protect those already in poverty from experiencing deeper forms of hardship.
Poverty rates since April 2021
Since April 2021, Government support measures have been increasingly dismantled and the cost of living has risen rapidly. Most significantly, the average household energy bill has risen to around £2,000. UK households are now set for the biggest fall in real income and living standards in three decades.
Despite this cost of living crisis, the UK Government has not provided the same scale of support that was given to vulnerable households during the pandemic. As a result, JRF predicts that 600,000 more people will be pulled below the poverty line from this month, including 150,000 children. If current trends continue, deep poverty will continue to rise too.
Next steps for the UK Government
Decreases in absolute poverty over the first year of the pandemic are a cause for celebration and point to the important role of social security in reducing overall rates of poverty. There is a need, however, for the UK Government to step in once again with measures to address the projected increase in rates of absolute poverty, and ongoing rises in deep poverty.
The social security system is proven to be one of the best ways to provide targeted support to households most at risk of poverty, including Black and Asian families, and families with children and disabled individuals. Measures could include:
- Uprating benefits in line with current inflation levels to help the poorest families manage through the cost of living crisis.
- Increasing the benefit cap in line with current average earnings.
- Creating a new or improved disability payment that reflects the true cost of disability, as suggested by the lived experience experts from the Commission on Social Security.
- Doubling Warm Home Discount payments in winter 2022/23 to provide meaningful help with winter fuel bills for low income families.
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