The economic impact of poverty on UK families

Date: 21st August 2017
Category: Social security, Child poverty

A Buttle UK report -- the Real Face of Child Poverty in the UK in 2017 -- looks at the economic impact of poverty on UK families, and highlights the turning points for children in crisis.

The report sets out to investigate the current reality of living on low incomes in the UK today. It highlights the changing profile of those that are disadvantaged and the level of insecurity and uncertainty that they face, backed up by data and analysis collected by Buttle UK.

Buttle UK is the country's largest grant-giving charity that gives funds directly to children, young people and families. They have analysed 125,000 grant applications made in the last 10 years to create a dataset of the demographics and experiences some of the most vulnerable in society.

The key findings are:

The profile of those families that are struggling most is changing

There have been some positive aspects the economic recovery - more people are in work than ever before. However, at the same time there has been a big shift in those classed as experiencing 'in-work poverty', a rise of 1.1 million people since 2010/11. As a result, two thirds of those children classified as poor are so despite the fact that at least one of their parents is in work. More people are living in private rented housing, where the costs are high and the tenancies lack stability. The changing pattern of housing tenure, and the increasing insecurity in the housing market, is illustrated by a staggering 60 per cent rise in the number of evictions by private landlords, between 2010/11 and 2015/16.
Low-income families are the hardest hit by recent economic changes and are subject to a 'poverty premium'

Benefits have been frozen but prices are rising, adding increasing pressure to weekly budgets.

Child benefit will have risen by just 2 per cent between 2010 and 2020, compared with projected price rises of 35 per cent. At the same time, they are subject to the 'poverty premium', where they are paying proportionately more for basic goods and services because of their lack of access to cheaper credit, better energy tariffs or deals that otherwise penalise low usage, or the inability to buy in bulk. Their insurance premiums are higher because of where they live, and these places are often 'ATM deserts' where the only access to a cash machine will mean a fee. A calculation by the End Child Poverty Coalition found that the costs added to the annual budget for a typical low-income family could be as much as £1,700 per year.

Parents have to make choices between spending money on food, bills or their children

These combined pressures make the reality of everyday life incredibly challenging. Children themselves are isolated and lack forms of engagement and stimulation beyond the home. Their diets are poor. When money is so tight, the ability to meet basic material needs is an ongoing battle: a cooker or washing machine breaking down - or moving into a new unfurnished property - can create a crisis.

Northern cities are among the UK's most crisis-stricken while southern and coastal areas face hidden poverty

The findings reveal the location and nature of the highest levels of families in crisis - defined by as being on very low income and dealing with complex social issues.

• Download the full 'Chances for Children' report here.