Latest analysis of Households below a Minimum Income Standard published

Nearly half of working-age adults living below the Minimum Income Standard (MIS) are in working households, shows a new report from the Centre for Research in Social Policy at Loughborough University. The findings highlight that work often fails to lift people out of poverty, in a direct challenge to the DWP’s newly announced ‘Way to Work’ campaign.

Households Below a Minimum Income Standard: 2008/09 to 2019/20 was funded and published by the Joseph Rowntree Foundation (JRF). The report shows that among people with inadequate income for a socially acceptable standard of living, 49% are in households where there is some work, and one in five are in households were all adults are in full-time work. In-work poverty is particularly prevalent among single parents – 43% of lone parents in full-time work do not have the income they need for a minimum standard of living.

Children remain the group most likely to be living below MIS, with 40% of living in households with inadequate income. Although pensioners are the least likely to be in a household below MIS, they have seen a sharp increase in risk since 2008/9, with the proportion below MIS increasing from 12% to 18% in 2019/20.

Low pay and in-work poverty continue to be an ongoing policy challenge, but it remains the case that those who are unemployed or economically inactive are most at risk of having an inadequate income. Among single adults without children, 92% of those who are unemployed and 77% of those who are economically inactive have an income that fails to provide a socially acceptable standard of living. Government interventions have done little to address the long-standing and growing inadequacy of support for those households out of work or unable to work. Despite the end of the general benefit freeze in 2020, this will do little to reverse the decade-long consequences of austerity measures. The benefit cap and the freeze in local housing allowance, along with rapidly rising inflation, will mean that many more households are at risk of falling below the threshold for a socially acceptable standard of living.

The latest report is based on the latest available data, up to 2019/20, and does not therefore include the period affected by COVID19.  However, it is clear that the impact of COVID-19 is likely to continue beyond the immediate ‘shock’ to incomes. The full implications of the pandemic for living standards the different ways in which this has been experienced across and within demographic groups will therefore be an important topic for future reports

Padley, M. and Stone, J. (2022) Households below a Minimum Income Standard: 2008/09 to 2019/20.  York: Joseph Rowntree Foundation.