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Employment does not prevent poverty, warns Joseph Rowntree Foundation

Two-thirds of working age adults in poverty live in a household where someone is working, according to the latest UK Poverty 2025 report.

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Employment does not prevent poverty, warns Joseph Rowntree Foundation
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Two-thirds of working age adults in poverty live in a household where someone is working, according to the latest UK Poverty 2025 report from the Joseph Rowntree Foundation.

The findings highlighted that employment alone no longer guarantees financial security, with low wages, job insecurity, and rising living costs leaving millions of workers struggling to afford basic necessities.

Part-time workers were found to be at a significantly higher risk of poverty, with a rate of 22% compared to 8% for full-time workers.

Workers in certain industries are particularly affected, with those in administrative and support services (22%), accommodation and food services (23%), and agriculture, forestry, and fishing (21%) experiencing the highest poverty rates.

Self-employed part-time workers were more than twice as likely to be in poverty as employees, with 23% living below the poverty line.

Housing costs were a major factor driving in-work poverty.

The report showed that 44% of social renters and 35% of private renters were in poverty after housing costs are considered.

In London, where rent prices are highest, 46% of those in poverty only fell below the threshold after paying for housing.

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Many renters, particularly those in private housing, were unable to keep up with rising costs, pushing them further into financial hardship.

The study also highlighted the role of the social security system in failing to support working households.

The basic rate of Universal Credit remains at historically low levels, and deductions from benefits mean many working claimants are left without enough to cover essentials.

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The Joseph Rowntree Foundation warned that the two-child limit and benefit cap disproportionately affect larger families, contributing to higher child poverty rates.

More than four million households in the poorest fifth are going without essentials, and 3.2 million had cut back on food or gone hungry.

The economic outlook remains bleak, with the Office for Budget Responsibility (OBR) forecasting no real wage growth between 2025 and 2029.

Meanwhile, benefits are set to rise only in line with inflation, and the Local Housing Allowance is due to be frozen again, further straining household finances.

The report concluded that in-work poverty will not decline without significant intervention.

The foundation called for reforms, including increasing financial protections for workers, expanding access to affordable housing, and ensuring the social security system provides enough for people to afford the essentials.

Paul Nowak, general secretary at TUC said:  “Every worker deserves to earn a decent living.

“But many working households are struggling to keep their heads above water. This is unacceptable.

“Working people should be able to put food on the table for their families and keep their children warm during the winter.   

“After 14 years of Tory chaos and stagnation, we urgently need to boost living standards.   

“That’s why this government’s Make Work Pay agenda is so crucial for millions of families up and down the country. 

“More money in working people’s pockets means more spend on our high streets – that’s good for workers and good for local economies.  

“And the Employment Rights Bill will mean more good and secure jobs – boosting productivity for businesses and giving workers more control over their lives and better chances to progress.  

“Better work is crucial for ending child poverty, but decent social security matters too.

“The Government must remove the two-child benefit cap which is keeping too many children in working households in poverty.”  

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