End in-work poverty

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Poverty doesn’t just affect people out of work. More and more it affects workers. Around one in six working households face living below the official poverty rate, fuelled by rapid house price growth and a lack of affordable childcare, according to a think tank. Britain’s relative poverty rate among working households hit a new high of 17 percent before the coronavirus pandemic took hold in early 2020, the Institute for Public Policy Research (IPPR) said.

For increasing numbers of people, work is a route into poverty, not a way out. Even two-earner families where one partner works full time and one works part-time are being pulled into poverty, according to the findings. For people in this group, the chances of being pulled into poverty have doubled over the past two decades, from one in 20 to one in ten, the IPPR said. Even for households with two people in full-time work, the chances of being pulled into poverty has more than doubled over the same period, from 1.4 percent to 3.9 percent.

Working poverty rates are particularly high in London, Wales, and the North of England, according to the IPPR. Spiraling housing costs, low wages, a failing benefits system and a lack of affordable childcare sit behind the growth in poverty, the No Longer ‘Managing’ report found. Far from people living easily on benefits, billions are siphoned off into the pockets of landlords. The IPPR estimates £11.1 billion of housing support spending went to private landlords last year.

The report called for higher state subsidies for children under five and wraparound care for school pupils. Clare McNeil, IPPR associate director and head of its future welfare state programme, said: “These shocking new figures should be a wake-up call for everyone concerned about our future.“We need an alternative to what the government calls ‘leveling up’.“Short-term fixes are needed to alleviate the immediate crisis, but to solve the underlying problem we need a far deeper rethink of housing, childcare, social security, and work.”

Pat Harrington, general secretary of Solidarity, commented: “We need structural changes in our society that distribute wealth, risk and opportunity more fairly. This is the way we will ultimately lift our people out of poverty”.

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