Fewer children living in relative poverty

14 Jun 13
The number of children living in relative poverty has fallen by around a quarter since the financial crisis in 2007/08, the Institute for Fiscal Studies has found.

By Richard Johnstone | 14 June 2013

The number of children living in relative poverty has fallen by around a quarter since the financial crisis in 2007/08, the Institute for Fiscal Studies has found.

At the same time, the number of people living in absolute poverty has increased, the economic think-tank said. It was commenting on statistics for 2011/12 published by the Department for Work and Pensions yesterday in Households below average income.

In that year, the number of people below the absolute poverty threshold rose from 9.8 million to 10.8 million – its highest level since 2002/03. Absolute poverty is defined as a household income below 60% of median incomes the previous year, before housing costs.

However, relative poverty, defined as a household income below 60% of the contemporary median, was unchanged at 9.8 million, compared with 2009/10. The IFS said this was due to incomes falling by similar proportions across all income groups in the year, which pushed more people into absolute poverty but left the relative picture unchanged.

Overall, around 17.4% of children – 2.3 million – are living in relative poverty, the IFS said, which is also unchanged from 2010/11.

This is down from 26.7% in 1996/7 and is now at the lowest level since the mid-1980s. The report said this was due to substantial increases in the generosity of means-tested benefits for low- and middle-income families with children in recent decades.

However, the number of children who live in poverty even when their parents are working is ‘an increasingly important component’ in the figures, the IFS found. In 2011/12, 66% of poor children lived in a family with at least one parent in work, which the IFS said was in ‘sharp contrast with earlier periods’.

In its analysis of the figures, the Child Poverty Action Group said the number of children living in poverty as part of working families increased by 6 percentage points in 2011/12.

Chief executive Alison Garnham said this exposed ‘the myth that the main cause of poverty is people choosing not to work’.

She added: ‘The truth is that for a growing number of families work isn’t working. The promise that work would be a route out of poverty has not been kept as wages stagnate and spending cuts have hurt low-income working families.’

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