Press release

Government response to Households Below Average Income figures

The latest Households Below Average Income figures were published today. The statistics cover the UK income distribution in 2008/09.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The latest Households Below Average Income figures were published today. The statistics cover the UK income distribution in 2008/09, including the latest figures for the number and percentage of children, pensioners and working-age people in the UK living in relative and absolute poverty. Today’s figures show:                                                          

  • In 2008/09 5.8 million working age adults living in relative poverty Before Housing Costs (BHC) and 7.8 million After Housing Costs (AHC). Compared to 2007/08 this represents a rise of 0.2m (BHC) and 0.3m (AHC).
  • The number of people in working-age poverty is the highest since records began.
  • In 2008/09 2.3 million pensioners living in relative poverty BHC and 1.8 million AHC which represents a fall of 0.2m BHC and 0.2m AHC on 2007/08.
  • In 2008/09 2.8 million children living in relative poverty BHC and  3.9 million AHC. Compared to 2007/08 this represents a fall of 0.1m BHC and 0.1m AHC.
  • Overall inequality remains at historically high levels.

Secretary of State for Work and Pensions,  Rt Hon Iain Duncan Smith MP said:

These statistics reveal the scale of poverty in the UK today. Millions of children, adults and pensioners are daily experiencing the crushing disadvantage that poverty brings. They are living at the margins of society, unable to achieve their aspirations and trapped in dependency.  Such levels of poverty are unacceptable and today’s statistics show that, despite huge expenditure, this has made little impact in helping the poorest.

Vast sums of money have been poured into the benefits system over the last decade in an attempt to address poverty, but today’s statistics clearly show that this approach has failed. Little progress has been made in tackling child poverty, society is more unequal than 50 years ago and there are more working age people living in poverty than ever before. A new approach is needed which addresses the drivers behind poverty and actually improves the outcomes of the millions of adults and children trapped in poverty.

It is right that we invest in addressing poverty, but we must focus our resources where they will be most effective. Work, for the vast majority of people, is the best route out of poverty.

Yet the current welfare system is trapping in dependency the very people it is designed to help. The rise in working age poverty and continued inequality show that we must make work pay and the first choice for millions of people. It is not right that someone can actually be worse off by taking work, we should be rewarding such positive behaviour by making work pay.

Likewise, we must demand a return on our investment in work programmes. It is crucial that we fully support people making the transition into work, but tax payers’ money should be spent on initiatives that work and make a difference to people’s lives.

 ”The time for piecemeal reform has ended. There has never been a more pressing need for fundamental radical reform and we will waste no time in acting.

Pensions Minister Steve Webb MP said:

I welcome the fall in pensioner poverty.  However, with 2.3 million pensioners still living in poverty the Government has been left with a big challenge. Women continue to suffer disproportionately with 17 per cent still living in poverty.

It is clear that despite the myriad of help available, too many people are either deciding not to take it up, or find the system so confusing that they can’t get the help that is rightfully theirs.  We must look to create a simpler system of financial support that works for pensioners, as opposed to one where too many feel it is hard work to get the help they need.

We will restore the earnings link to the basic state pension next year and guarantee every pensioner an increase of at least 2.5 per cent each year on their basic state pension.

In a modern Britain it is scandalous that nearly 1 in 5 pensioners are living in poverty and many are materially deprived, meaning they cannot afford basic goods or services.

Minister for Disabled People, Maria Miller MP said:

These statistics reveal the huge challenge facing us. It’s tragic that the gap between the richest and poorest has got bigger over the past 10 years and that we’re now living in a more unequal society.  We welcome the decline in the number of disabled people in poverty, but it is clear that much more needs to be done to tackle the specific needs of disabled people.

Our new policies will mean a real change - tackling the causes of poverty; not just giving out cash payments which do not tackle the real underlying problems.

In 2008/09 over £2bn extra went into tax credits and yet the number of children in poverty has barely changed. To succeed in lifting children out of poverty we must help their parents get into and stay in work.

Notes for Editors

  • The latest figures on child, pensioner and working-age adult poverty can be found in Households Below Average Income (HBAI) 2008/09. HBAI figures can be downloaded from along with a statistical press notice. ** **
Published 20 May 2010