Poverty and inequality

More than one fifth of the UK population are in poverty – and almost half of these are in “deep poverty” [1].   The number of children in poverty within workless families has fallen in recent years – mainly as a result of increased welfare provision, but child poverty within working families is the highest it has ever been. The government target to halve child poverty by 2010 was missed – and it is doubtful if the target to eradicate it entirely by 2020 will be met. The full effects of the economic downturn are not yet clear, high unemployment (particularly in 16-24 year olds) and the rising cost of living (see inflation) are likely to increase poverty.  Between 2010/11 and 2013/14 average incomes are forecast to stagnate and both absolute and relative poverty among children and working-age adults are expected to rise. [2].

Inequalities in income and earnings are high in the UK compared with other developed countries as well as compared to 30 years ago.  While levels of income inequality have remained relatively stable since 2005 the gap between the rich and poor is still greater in the UK than in three quarters of OECD countries [3]. Earning differences between men and women are narrowing but remain pronounced. Inequality between ethno-religious groups remains high, almost all minority ethnic groups are less likely to be in paid work than White British men and women; and those that are in paid employment are likely to be paid less than White British men and women of the same age, qualifications and position [4]. Social mobility is low in the UK; the chances of a child from a poor family enjoying a better education and higher wages than their parents is much lower in Britain than other developed countries [5].  These stark inequalities are likely to continue into the foreseeable future.

What are the implications?

  • As the cost of living increases and downward pressure on income continues, the standard of living for the poorest in society may decrease further.
  • An increase in the amount of people with unmet basic needs including food, healthcare and shelter leading to the further entrenchment of poverty.  The interrelationship of needs in a changing global and domestic environment may become more complex to identify and meet.
  • Health inequalities are likely to increase however there may be more focused attention on watching how inequalities develop.
  • Increased pressure and demand for services, particularly of those provided by VCOs in light of constrained public spending, and an increasing role of the VCS in public service delivery.
  • As competition for resources increases and stark inequalities between groups remain, social tensions, polarisation, marginalisation and unrest are likely to increase.
  • Increased discrimination towards those in poverty, particularly as large inequalities persist (see attitudes towards domestic poverty)

Moving forward

An increase in levels of poverty has an impact on the whole of UK society.

  • Does your organisation have a role to play in addressing tensions and inequality between groups and giving a voice to disadvantaged communities and groups when resources are scarce?
  • Can you provide activities that contribute to a cohesive and inclusive society?
  • Could your organisation learn more about how to break cycles of poverty and how to address its causes?

As the government decreases its investment in health and social care and there is increasing complexity in service delivery the ability of some potentially vulnerable groups to access services may be reduced.  Coupled with increasing living and commodity prices it could mean less support available to those that need it most.

  • How can your organisation reach out to vulnerable groups experiencing poverty and inequality that may be isolated by the large changes in public service delivery?
  • Can you diversify the services you provide in order to meet rising levels of poverty or attempt to address continuing levels of inequality?

Want to know more?

Child and working-age poverty to 2013-14

Published by: The Institute of Fiscal Studies (IFS)

Date: 2011

Format: PDF (148KB)

What is it? A brief presentation examining recent projections for poverty based on current policies.

How useful is this? This presentation provides an accessible overview of not just recent trends in relative poverty but also forecasts for how levels are likely to change in the next few years based on current policies.  The data is summarised nicely and the overall result is illustrated by a graph on page 9.  It finishes by examining projected relative and absolute poverty with and without coalition government reforms – of which there is a significant difference.

Other comments: A summary report of the same data can be found here.

Poverty and Equality in the UK: 2010

Published by: The Institute of Fiscal Studies

Date: 2010

Format: PDF

What is it? This annual report looks at the current living standards of different population groups and inequality of income in the UK.

How useful is this? The report contains up-to-date statistics on standards of living, poverty and income inequality trends and assesses the changes that have occurred since Labour came to power, with a particular focus on the changes that have occurred in the latest year of data. It also includes a regional breakdown of poverty levels across the whole of the UK. The analysis is based upon the latest figures from the Department for Work and Pensions' Households Below Average Income (HBAI) series, published in May 2010. The HBAI series takes household income as its measure of living standards, and is derived from the Family Resources Survey, a survey of around 25,000 households in the United Kingdom that asks detailed questions about income from a range of sources.

Other comments: Other IFS publications on the topic of “Inequality, poverty and well-being” can be foundhere.

The Poverty Site

Published by: The Joseph Rowntree Foundation

Date: Ongoing

Format: Web

What is it? A website that monitors what is happening to poverty and social exclusion in the UK.

How useful is this? This website contains a variety of information in different formats about poverty. All data is the latest available from official sources. The material is organised around 100 statistical indicators covering all aspects of the subject, from income and work to health and education and covers all parts of the United Kingdom, with specific sections for Scotland, Wales and Northern Ireland. The indicators and graphs can be viewed by age group or by subject. There are also interactive maps where sub-regional data is available. The key facts section is particularly useful for a short summary of the stats and analysis for different factors affecting poverty such as work, income, education, older people and ethnic minorities. For more detail, there is a report section which focuses on different indicators of poverty and parts of the UK.

Other comments: This website has replaced the Joseph Rowntree’s yearly analysis ‘Monitoring Poverty and Social Exclusion’ but previous editions of reports are available on the site.


  1. Defined by the Joseph Rowntree Foundation as households living on less then 60% of median income after deducting housing costs, ‘Monitoring poverty and social exclusion’ [back]
  2. Child and working-age poverty set to rise in next three years – IFS, 2010 [back]
  3. Growing Unequal? : Income Distribution and Poverty in OECD Countries, Country Note: United Kingdom – OECD, 2008 [back]
  4. Report of the National Equality Panel: Executive Summary - Equalities Office, 2010 [back]
  5. OECD: UK has worse social mobility record than other developed countries – Guardian, 2010 [back]
Last updated at 15:25 Wed 11/May/11.

Recent comments


All of us, from individual to big industries, have been given lots of burdens by the economic recession. Challenges have further been increased by the credit crunch. With regards to this, a pension is more or less a portion of salary that is set aside by your employer that you will receive monthly as a stipend upon retirement. British citizens living abroad have lately had disrupted pension payments in the UK. The exchange organization Moneycorp has found out that British banks have been charging some pretty steep rates for international transfers to expatriates in other countries. No doubt a lot of people are not happy with their banks’ treatment of the pension money that they worked so hard for, only to have it penalized so a bank executive can buy another ivory plated back scratcher.

Kathryn's picture


Third Sector Foresight

Strong words Carolyn! Do you think this means that we may see people coming back to work who thought they’d retired? Or working for longer before they retire?

On another topic… I read with interest about The Spirit Level, published last month. In it, the authors argue that it’s not just the poor that suffer from inequality but also the rich. They analyse data to demonstrate that inequality negatively affects rich and poor alike – it is an issue that cuts across income to affect all.

I think we touch on this in this driver where we say that inequality could result in ‘higher levels of social fragmentation, marginalisation and unrest’, but it could be explored much futher.

What do you think about the premise of the book? Does it ring true for you?
If it does, does it necessitate a different approach to inequality, a stepchange in the way people tackle this issue?

This has implications for campaigners perhaps….as one reviewer has commented, “This is much more than an academic book; it is a call to action.

Hi, you may want to look at my child poverty post, which relates to poverty & inequalities and the recession, particularly in London but also in the rest of UK. The post can be viewed here

Sue's picture


Knowing the local environment we work in is essential for the voluntary sector, that means keeping a finger on the pulse. Very good information on poverty in London is contained in Londons Poverty Profile produced by the City Parochial Foundation. Download from http://londonspovertyprofile.org.uk

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