A new measure of poverty in the UK

The Social Metrics Commission have used Understanding Society to show who in the UK is poor now and how that has changed over time.

Data from Understanding Society has been used by the Social Metrics Commission to develop a new metric for measuring poverty in the UK. Currently, there is no agreed UK government measure of poverty and the aim of the Social Metrics Commission has been to develop a new approach to poverty measurement that can inform policy makers, enable action and improve the lives of people in poverty.

For the first time, as well as looking at incomes, the new metric considers a range of other of inescapable costs that reduce people’s spending power, such as rent or mortgage payments, childcare and the extra costs of living with a disability. The metric also takes into account the positive impact of people’s liquid assets on alleviating immediate poverty, which could include savings, stocks and shares. The new metric reflects more accurately the realities and experiences of living in poverty than previous measures.

What did the Commission find?

  • 14.2 million people in the UK population live in poverty: 8.4 million working-age adults; 4.5 million children; and 1.4 million pension age adults
  • Over half of those in poverty (58.2%) also live in persistent poverty. This means that more than one in ten (7.7 million) of the total UK population are in poverty now and have been in poverty for at least two of the previous three years. Persistent poverty is highest in families more than 10% below the poverty line, in workless families and families where someone is disabled.
  • People with a disability are much more likely to be living in poverty. Nearly half of the 14.2 million people in poverty live in families with a disabled person (6.9 million people equal to 48.3% of those in poverty).
  • Far fewer pensioners are living in poverty than previously thought, with a significant fall in pensioner poverty over the last 15 years. Poverty rates amongst pension-age adults have nearly halved since 2001, and have fallen to one in ten, a drop from 17% of the total population in poverty in 2001 to 11% in 2017. There are, however some pensioner groups still experiencing high levels of poverty. For example, the poverty rate for pensioners who do not own their own home is 34.2%.

How was Understanding Society used?

The Commission used data from Understanding Society to investigate 'poverty persistence' - how long families have been in poverty and what might be causing this. They used information on the level of debt families have and the lived experience of people experiencing poverty, including their reported health, family relationships, job opportunities and family finances. The longitudinal nature of the Understanding Society data allowed the Commission to measure changes in poverty over time.

David Hutchison, CEO of Social Finance, from the Social Metric Commission said:

What do we mean by living in poverty? Five people living in one room because they can’t afford any more space. Falling behind on household bills with no savings to rely on. Not being able to go out to work because childcare costs are too high. If we are serious about supporting vulnerable people, we need to understand what drives them into poverty and what keeps them there. This new measure is a bold attempt to understand the characteristics of those who face the challenge that their resources fall short of the inescapable costs of daily life.  It is a critical step if we are to change the way we tackle poverty in the UK.”

The Social Metrics Commission is an independent body of experts that brings together thinkers from both sides of the political spectrum with data and analytical experts. The Commission is  dedicated to helping policy makers and the public understand and act to tackle poverty. You can read the full report here.