In-work poverty in the recession

The share of poor households accounted for by working households (as opposed to workless households) has been increasing in the UK over the last decade, with more than half of poor children living in working households before the recession. This note presents new data explaining what has happened to in-work poverty since the recession began, using newly released data covering the period April 2008 to March 2009.

Analysts had thought that the trend towards a greater proportion of poverty being found among working households might be reversed by the recession, as low earners lost their jobs and swapped in-work poverty for workless poverty. However, analysis shows that this had not happened by March 2009 and that in-work poverty continues to account for a rising share of poverty. This creates a key challenge for the Coalition Government as it sets out its plans for welfare reform and develops its child poverty strategy.