Current Students and Staff

A decade after the economic downturn, two million more people than in 2008 are on incomes too low to secure a living standard considered an acceptable minimum by the British public, according to new research from Loughborough University’s Centre for Research in Social Policy (CRSP).

For some groups, there has been an improvement since 2013, but others continue to face very challenging circumstances. The research shows that nearly three quarters of lone parent families have too little income to meet their minimum needs. It also shows that for single women in their early 60s, the raising of the age at which they can draw their pension has resulted in a doubling of the proportion below the minimum since 2008, from one in five to two in five women in this group.

These are the latest findings of the Minimum Income Standard (MIS) programme of research, funded by the Joseph Rowntree Foundation and carried out at Loughborough University. The MIS research calculates the minimum budget individuals require to cover their material needs and to participate in society, according to what groups of members of the public say you need.

The figures show how many people lived in households below the MIS level in 2016/17 (the latest income data) compared to 2008/09. They highlight that over this period:

• The total number of people with too little income has risen from 16.5 million to 18.7 million (although there has been a fall since 2013, when it was 20.4 million).

• Out of 2.5 million children living in lone parent households, more than 1.8 million (74%) have household incomes below the minimum.  

• Nearly half of children of lone parents (1.2 million) face the hardship of having family income at least 25% below what is needed. With cuts in benefits that have been announced but not fully implemented, this is projected to rise to 1.5 million, so six in every ten children in lone parent families is set to face serious hardship.

• The number of single women aged 60-64 living below the minimum has doubled from just over 100,000 to nearly 200,000. This has coincided with the raising of the state pension age for women, leaving more either relying on out-of-work benefits or taking jobs on relatively low pay.

• The group that have seen the biggest reduction since 2013 in the numbers below the minimum have been working age adults without children. The proportion below MIS fell from around 30% to 25% in this more recent period, reaching the same level as it was in 2008. Some of this group have been helped by the Government’s introduction of the National Living Wage, encouraged by the Living Wage campaign which uses the MIS research as a benchmark.

The study looks in detail at factors that have prevented most lone parent families from reaching adequate income, despite the fact that six in ten lone parents now work, up from only four in ten in the 1990s. It finds that most of the new jobs have been part time, and those working part-time have become more likely to have inadequate incomes. Currently 640,000 children live with lone parents in part-time work whose incomes are below the minimum, compared to 390,000 a decade ago: a dramatic increase of 65%.

Cuts in working benefits are exacerbating this situation, as families without enough income from work to make ends meet now receive less help from the state. The research projects what cuts such as the benefits freeze and the reduction in tax credit and Universal Credit entitlements will eventually mean for lone parent families.

Their main effect is to lower further the incomes of families currently just below the MIS level, so that more fall to a level that makes family hardship highly likely – an income at least a quarter below the minimum. Under this projection, 86% of children with non-working lone parents and 40% of those with working lone parents are set to face this additional hardship.

For older single women, the analysis uncovers new evidence that the rise in the female pension age has hit living standards at this stage of life. Since 2010, the age at which women can draw a state pension has risen from 60 to align with the male pension age of 65. The research finds that more women are working longer, but in jobs that on average pay less than earnings of women in this age-group a decade ago.

In addition, many are not working, and are having to rely on benefits that are much lower than they would have received if they had been able to take the state pension. The overall result is that nearly two in five women aged 60-64 who live on their own (39%) have incomes too low to reach the Minimum Income Standard, up from around one in five (19%) in 2008/09.

Matt Padley, a Research Fellow with CRSP and co-author of the report, said: “We have been monitoring the number of households on low incomes for nearly a decade. Early in that period, the numbers with incomes below the minimum were rising sharply, and for some groups things have eased somewhat in recent years. However, the fact that over a quarter of the population lack the income to reach the minimum that the general public considers you need for an acceptable living standard is not good news.

“This is in part explained by overall economic conditions, but we have also identified how particular government policies have made things better or worse for specific groups. So, some low-paid workers without children who do not rely on state support have gained significantly from the National Living Wage. On the other hand, we have identified how the raising of the women’s pension age has hit older women’s overall living standards: the additional amount that they work as a result has not produced sufficient income to replace the pensions they would have otherwise received”.

Professor Donald Hirsch, Director or CRSP and co-author, added: “The trend for lone parents shows very clearly that moving more lone parents into work is not a guaranteed way of tackling family hardship. The main trend has been for these families to get part time jobs that still leave them short of what they need.

“Tax credits and Universal Credit were designed to supplement the income of such working families, but the value of this support has been seriously eroded over the past decade. The better pay rate being earned for those on the National Living Wage has helped, but not enough to offset these cuts. Only if more employment, better pay and sufficient public support for low income families were all aligned could children of lone parents no longer have to expect that they will face hardship when growing up”.

Ilona Haslewood, Projects Manager for the Joseph Rowntree Foundation said: “It’s simply not right that despite significantly more lone parents working, a rising number are unable to make ends meet. When you have to struggle to provide a stable home and to buy the essentials that the public agree are needed, this can have a major impact on family life.

 “We all want to live in a just society where hard work enables you to provide for your children - and a compassionate society where people are supported to raise their families. However, nearly three in four children with a lone parent live on less than what the public sees as a minimum level.

“The Government should be ensuring that work pays and that housing is affordable for the long term – and it is also vital that families have an anchor in difficult times. The Government should commit to ending the benefits freeze one year early to ensure that more children are not swept into poverty.”

The Households below MIS report, published by the Joseph Rowntree Foundation can be viewed here. A shorter analysis, Lone parents under pressure report, published by CRSP can be viewed here. Slides summarising the data from the Lone parents under pressure report can be viewed here.