Stop in-work poverty

Around two thirds of children in poverty in the UK have at least one parent in paid work. This bold figure undermines the claim that work provides a straightforward route out of poverty. Instead, it tells us a great deal about the type of work that low income parents currently undertake.

  • Low pay. Low pay is a routine feature of much of the work available to poorer families. While the national minimum wage sets a floor for pay levels, its adequacy must be questioned. Our most recent ‘Cost of a child’ report found that two parents working full-time on the minimum wage were still 12% short of the cost of raising their family.
  • Lack of sustainability. The low-pay sector is characterised by precarious jobs that do not provide steady employment or incomes. Moving in and out of work frequently, a pattern which is particularly common for lone parents, generates grave financial uncertainty for many families.
  • Limits on number of hours. Insecure jobs mean that many parents may work full-time one week, part-time the next and have no work the following week. Yet even if they do have reliable employment, many find it hard to work enough hours given caring commitments and other barriers to employment.
  • Low prospects. Lack of progression is commonplace in the low-pay sector. Few low-paid jobs offer scope for training and advancement, so the chance to increase incomes is highly unlikely. As a result, many low-pay jobs are nothing more than poverty traps.

While in-work benefits such as tax credits protect families from some of the worst effects of in-work poverty, they also acknowledge the realities of the low-pay sector in the UK. Current moves to combine in- and out-of-work benefits under universal credit are expected to smooth out many of the complexities families have experienced with tax credits to date. Yet cuts to Universal Credit, such as limiting child tax credits to two children only, and cuts to the work allowance, has stripped Universal Credit of its poverty fighting potential.

At CPAG we believe that a strategy which regards work as the only solution to poverty is unlikely to succeed. This is because it fails to address low pay, insecurity and the lack of prospects experienced by low-income families. Instead it is likely to cause untold hardship and stress for families.