In-work poverty ‘affects two-thirds of children’

Thinktank warns benefit cuts will bring further misery

Almost two-thirds of children in poverty are living with parents who work, according to a new study.

The Institute for Fiscal Studies (IFS) found that, while levels of absolute child poverty were unchanged between 2009/10 and 2013/14, the proportion living in a working family grew from 54% to 63% as wages lagged behind inflation.

And the independent economic thinktank warned that benefit cuts announced in Chancellor George Osborne’s Budget will put upward pressure on absolute poverty for working-age households, including those in work, over the next five years, as planned rises in the minimum wage fail to match welfare reductions.

The findings come just days after Work and Pensions Secretary Iain Duncan Smith announced plans to scrap the Government’s legally-binding target of lifting all children out of relative poverty by 2020, to be replaced with measures including levels of parental unemployment.

But IFS senior research economist Robert Joyce said the new report showed that in-work poverty was having a growing impact on children.

“The Government has recently emphasised worklessness as a cause of poverty,” said Mr Joyce, the report’s co-author.

“This makes sense, but tackling low living standards will be difficult without improvements for working families too.”

The IFS analysis of official figures found the decline in real-terms earnings since 2009, after inflation is taken into account, has forced the proportion of children who are in absolute poverty despite their parents working up from 19% to 21%.

Report co-author and IFS research economist Chris Belfield said: “The recent stability in absolute income poverty among children has masked important and offsetting trends.

“Since 2009/10, a fall in the number of workless families has acted to reduce poverty, but this has been offset by a substantial rise in in-work poverty.”

Child Poverty Action Group chief executive Alison Garnham said the report showed the “absurdity of the Government’s attempt to amend the Child Poverty Act to say there’s no such thing as working poverty”.