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The Institute for Fiscal Studies published “Living Standards, poverty and inequality in the UK: 2019” on 19 June which acknowledged that the rise of in-work relative poverty is a complex issue with no easy answer. They cited a number of reasons, including that there are more people in work overall and far fewer workless households, for example, there are 667,000 fewer children in workless households compared with 2010. Furthermore, far fewer pensioners are poor than ever before, primarily driven by increased government spending on pension benefits. This has raised the relative poverty line resulting in more ‘in work’ households falling below the line in recent years than they would have done without these increases in pensioner incomes.
The IFS estimated that the remaining third of the increase is due to two main factors: that earnings have risen less quickly towards the bottom of the distribution than the top and that housing costs have risen faster for poorer households than richer ones.
We know that there is more to do to support working people. The Chancellor has set out the Government’s ambition to end low pay across the UK. The National Living Wage, rose to £8.21 an hour in April 2019 and is expected to benefit over 1.7m people. The government is working to ease issues around high housing costs by delivering over 1.3 million extra homes in England since 2010. The Government is now on track to raise housing supply to 300,000 per year on average by the mid-2020s. Over £44 billion of new financial support will be available for housing over the next five years.