Is the UK in Poverty?

For many low income households in the United Kingdom, it would seem that the cost of living is rising faster than expected, and subsequently minimum earning thresholds are insufficient to keep much of the population out of poverty.

This news comes as a result of studies commissioned by the Joseph Rowntree foundation, a not for profit organization offering affordable housing to low income families.  The conclusion was that on average, the costs of living were up over 5% alone this year affecting low income families and pensioners alike.  Effectively, this means one in four households is affected by these recent rises.

The rise in living costs comes as a result of increased fuel prices, as well as cost of food and public transport.  Thanks to the economic crisis they have all seen price hikes to the extent of between 7 to 12%.  As a result of this a report was commissioned to try and establish whether the benefit system is actually paying enough to working age people.  The conclusion of the report detailed that the benefit system is failing drastically to ensure that people have enough support to meet the minimum income standards for living.

Overall the study showed how close many of the UK’s population actually are the poverty line, pointing out that many people losing their jobs are failing beneath it whilst on benefits, making only 42% of their minimum income standard.  To raise a single person out of relative poverty, minimum wages need to rise proportionately by at least £1 per hour in order to allow people to continue playing an active role in society.

At a time where the economic outlook for the UK is uncertain at best, many economists are simply waiting for the bottoming out of the recession.  When this will happen, is open to much speculation.

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