- One fifth (20.3%) of the UK population live in poverty – equivalent to 13.6 million people.
- Before the pandemic, poverty rates for children and working-age adults in 2019/20 rose to their highest since the 2008/9 financial crisis. For working-age adults, rates had remained constant since 2015/16, reflecting how incomes have both increased due to higher employment, and fallen due to social security cuts.
- Figures for 2020/21 have been affected by the coronavirus pandemic, and the sharp fall between 2019/20 and 2020/21 should be viewed with caution and not in isolation from broader trends.
Poverty can affect health when financial resources are insufficient to meet basic living needs, such as adequate heating for the home, appropriate clothing or adequate nutrition.
The chart shows the proportion of people living in poverty in the UK for each year from 1994/95 to 2020/21 – the latest year for which data is available. Data is separated by all people, children, working-age adults and pensioners.
A total of 20.3% – or around 13.6 million people – live in poverty, a figure that has changed little since the mid-2000s.
The relatively static overall (all people) measure hides considerable variation between age groups:
- Child poverty fell from 34% to 28% between 1998/99 and 2004/05 which is seen as a result of social policy success, such as Child Tax Credit. The child poverty rate has remained at around 30% since 2005/06 with a fall in 2010/11, largely due to median income falling after the financial crisis. Before the pandemic child poverty was forecast to rise, driven by the phasing in of the policy of limiting some social security payments to two children.
- Poverty among working-age people fell between 2018/19 and 2019/20 to 20.1%.
- The poverty rate for pensioners more than halved between the late 1990s and its low point in 2012/13, although it has since crept up to 16%. The reduction in pensioner poverty up until 2012/13 was partly due to the introduction of more generous financial support through Pension Credit.
Within each group, the composition of the population in poverty has shifted. For people of working age and with children, this includes the growth of in-work poverty (people in work and still in poverty) and a shift towards more families privately renting (where housing costs are higher). There have been similar shifts for working-age adults.
Poverty trends highlight the important role that policy can play, such as the effective, sustained effort to reduce pensioner and child poverty in the late 1990s and 2000s. The stagnation of poverty rates in recent years shows the limits of an approach that relies on employment growth alone to support incomes and replace the income people have lost through cuts to social security. The pandemic has highlighted the importance of a strong lifeline people can depend on to keep them afloat when they need it.
- Poverty is defined as an individual living in a household with a net household income below 60% of the median in that year.
- Income is adjusted for household size to reflect economies of scale. For example, a household of four needs more income for the same standard of living as a household of one, but not four times as much.
- Housing costs are deducted from income, to reflect that people with lower incomes in particular have fewer options for meeting their housing costs, relative to their income.
- Pensioner households are defined as those headed by a person aged 65 years or older.
- Northern Ireland data is only included in the survey from 2002/03 onwards.
- Figures for 2020/21 have been affected by the coronavirus pandemic and are subject to additional uncertainty. They should be viewed with caution and in line with broader trends.
Source: Department for Work and Pensions, Households Below Average Income: The Income Distribution Summary Tables 2020/21