Developed countries are seeing rise in poverty and UK is reflecting this trend. in 2022-23, approximately 21% of the UK population (14.3 million people) lived in relative poverty after housing costs defined as having a household income below 60% of the median. The absolute poverty rate (income below 60% of the 2010/11 median, adjusted for inflation) rose to 18% in 2022/23, affecting 12 million people, a 600,000 increase from the previous year—the largest rise in 30 years.
Absolute child poverty rose by 2 percentage points to 25% in 2022/23, with 300,000 more children affected, the worst increase since 1981. Larger families are particularly affected, with 55% of children in families with three or more children projected to be in poverty by 2027/28, and 77% for families with four or more children.
In 2022, 3.8 million people, including 1 million children, experienced destitution, unable to afford basic needs like food, warmth, or shelter. The Trussell Trust reported distributing 3 million emergency food parcels in the year to March 2024, nearly double the number from five years prior, with over 1 million for children. In June 2023, 9 million adults experienced food insecurity, with 3 million reporting not eating for an entire day due to inability to afford food.
Poverty rates were relatively stable at around 14% before 1979 but rose sharply in the 1980s under the Thatcher government due to unequal income growth, reaching levels 50% higher than the 1970s. From the late 1990s to the mid-2000s, poverty rates for children and pensioners fell due to policies like Child Tax Credit and Pension Credit. However, child poverty has risen since 2013/14, and overall poverty has remained stagnant since 2010. The cost-of-living crisis (2021–2023), driven by high inflation and energy price spikes following Russia’s invasion of Ukraine, exacerbated poverty, pushing more households into hardship.
The absolute poverty increase in 2022/23 was the largest since 1982, driven by inflation outpacing income growth. Child poverty has returned to pre-pandemic levels (30% in 2022/23), with a slight rise from 2021/22, while pensioner poverty fell slightly to 16%.
Soaring energy prices and inflation (peaking in 2022–2023) eroded real incomes, particularly for low-income households. Rising rents and mortgage interest rates increased housing costs, disproportionately affecting private renters.
The two-child benefit limit (introduced 2017) and benefit cap (2013) have been labeled “catastrophic” for larger families, contributing to 45% poverty rates for families with three or more children. Welfare benefits frozen in cash terms during austerity (2010–2020) lost value due to inflation, reducing support for low-income households.
Low pay and insecure work have increased in-work poverty, with nearly 1 in 10 people in poverty living in families in full-time work. Regional disparities persist, with high poverty rates in the West Midlands, inner London, and North West England, and lower rates in Scotland and Eastern England.
54% of those in severe hardship live in families with a disabled person, as disability benefits fail to cover extra living costs. Data for ethnic minorities constitutes 65% of Bangladeshi, 59% of Pakistani, and 49% of Black children live below the poverty line, compared to 24% of White children.
In Scotland: Child poverty is projected to fall due to policies like the Scottish Child Payment (£26.70/week) and plans to scrap the two-child benefit cap by April 2026, potentially helping 43,000 children. Scotland’s child poverty rate is expected to be 10 percentage points lower than England’s by 2029. In England areas like Birmingham and Tower Hamlets have the highest child poverty rates, with nearly 50% of children below the poverty line after housing costs. In Wales and Northern Ireland poverty rates are slightly lower than England but still significant, at 29% and 24% for children, respectively.
The previous Conservative government introduced Cost of Living payments (averaging £3,800 per household), which mitigated a potentially threefold worse poverty increase in 2022/23. The current Labour government (elected 2024) has committed to an “ambitious strategy” to reduce child poverty but has resisted calls to scrap the two-child benefit cap, citing fiscal constraints.
The UNICEF report (2023) ranked the UK among the worst high-income countries for child poverty outcomes, highlighting inadequate policy responses.
The Resolution Foundation predicts that without policy changes, 1.5 million more people, including 400,000 children, will be in relative poverty by 2029/30, with rates rising from 22% in 2024/25 to 23%. Child poverty is expected to rise across most of the UK, except in Scotland, where targeted interventions are projected to reduce rates. The two-child limit and benefit cap are forecast to push child poverty for larger families to unprecedented levels by 2027/28.
While government data and charity reports provide a robust picture, official poverty measures may understate true hardship by not fully accounting for differential inflation rates or rising housing costs. Additionally, the focus on relative and absolute poverty thresholds can obscure the lived experience of destitution and food insecurity, which have surged. The persistence of poverty in a wealthy nation like the UK raises questions about structural inequalities and policy priorities, particularly when wealth concentration among the richest continues to grow.
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