Working families on breadline would need to work eight days a week to escape it
New Action for Children analysis finds 300,000 low-income families with children trapped in poverty despite parent(s) working full time.
Our new research shows that an average low-income family where every parent was already working full time would need to squeeze in an extra 19 hours a week to escape the breadline¹ - equivalent to working an eight-day week².
While the government continues to state the best way to stop children growing up poor ‘is to ensure that they do not grow up in a workless household’³, the analysis of official figures reveals there are around 300,000 families with children living in poverty in the UK despite every parent being in full-time employment.
As well as looking at the number of extra hours needed to escape poverty, the research looked at earnings. It found the average (median) low-income family where every parent worked full time would need a weekly pay rise of £168 (£8,736 more a year) to clear the poverty line – and over a quarter (28%) would need to earn more than £300 extra a week (over £15,600 more annually)⁴.
Some factors include low pay and job quality, ethnicity, geographic location and inescapable costs like housing and disability:
- Nearly a quarter (24%) of parents within these low-income families were self-employed. Without protections like the minimum wage, holiday or sick pay, the self-employed are particularly at risk of poverty wages. The analysis shows nearly eight in 10 (78%) self-employed parents working full-time below the breadline are earning less than minimum wage.
It estimates there are 41,000 low-income families in full-time work who are trapped in poverty because at least one adult is self-employed with very low or even negative earnings (business losses).
- Nearly half (46%) of those in poverty working full time were single parent families, and nearly one in five (18%) were from London.
- Low-income parents in full-time work are much more likely to be in caring, leisure and other service and ‘elementary’ roles like cleaning, as well as significantly less likely to be in professional roles than the wider population of full-time workers. Nearly one in four (23%) are employed in the health and social work sector.
- The figures show that for this group of families, their housing costs are on average £28 a week higher than other households with children. Yet shockingly, even if all their housing costs were reduced to zero, two fifths (39%) would still be in poverty.
Action for Children’s chief executive, Paul Carberry, said: ‘Our research shows we need to be honest about why so many children are growing up poor and confront the myth that work alone is a passport out of poverty.
‘In this election year, this is something all political parties must address. Further research is needed into the financial challenges facing these working families so we can find more targeted and effective solutions.
‘This should be part of a wider programme of reform that strengthens the social security system and tackles the barriers to work and opportunity that are keeping families trapped in poverty.’
Dan Smith, 37, and his fiancée Leanne Jones, also 37, live in Kent with their four-year-old daughter, Beau.
Dan worked full-time at a specialist SEND school until November when he decided to become self-employed, starting a business as a SEND therapist supporting families with neurodiverse children. In the long run, he hopes he will able to earn more money to support his family.
It’s a risk starting up on my own. But I know if I can get some security with a new contract I’ll be able to earn more than I was, and have more time to spend with Beau and better meet her needs.
Leanne was working full-time until she had to halve her hours to help care for their daughter, Beau, who was born with Down’s Syndrome in 2020. Leanne now works five mornings a week, taking home on average around £1400 a month after tax.
Before Dan resigned from his job at the school, he was earning around £1900 a month after tax but his take-home pay has now fluctuates between £1000 and £1400 a month since becoming self-employed as a therapist. He’s currently waiting on news of whether he’s won a new contract – but he admits if he hasn’t, he may ‘be back to square one’ and have to search for a full-time job again.
Before Beau was born and Leanne had to go part-time, we were a £60,000 a year household - but we’re now living hand to mouth.
Dan continued: 'We’d worked really hard for many years to save £30,000 for a deposit for a house but when we looked into it, incredibly £30,000 wasn’t enough to make the repayments affordable on our incomes. The mortgage repayments would’ve been have been almost twice our rent at the time
‘So, instead we used our savings to set us up renting in a two-bed semi-detached house. Then it wasn’t long before we needed to bite into the savings more and more every month just to cover our day-to-day expenses as the cost of living went up and up.
‘A lot had to go on nursery fees which were around £1600 a month just after Beau was born and are still £900 or so now Leanne has gone back to work part time. We’ve worked out we’d be worse off if Leanne went full-time because of the extra fees.
‘We’re now down to the last bits of our house deposit savings and they’ll all be gone by next month. It’s disheartening when we realised it took us four times as long to save them as to spend them’, he added.
Dan receives £107 a month in personal independent payments for ADHD, the couple claim £88 in child benefit each month and receive £350 a month in Disability Living Allowance for Beau. After paying their housing costs, their joint income is around £300 a week on average.
Dan continued: ‘That sounds OK doesn’t it, £300 a week? But when you put down what else comes out - like £900 a month for nursery fees for five mornings a week, £300 on fuel, £350 on food, £160 on council tax or unplanned costs like our recent overnight trip to London for a specialist appointment for Beau, that brings us down well below £200 a week for anything unexpected, which there usually is.
We’re left in the negative every month now and have to keep using our savings – but they’re running out fast, so we’ll soon fall into our overdraft - it’s become a real struggle.
‘I’ve never labelled myself as someone in poverty, others are far worse off of course – but I realise we’re slowly falling into that low-income group now unless things pick up. We’ve not had a holiday of any sort for ten years, and we’ve really had to scrape together to even give our daughter essential things she needs.’
