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Monitoring Poverty and Social Exclusion 2016 - Our Response

Published: 7 Dec 2016

Monitoring_Poverty_and_Social_Exclusion_2016___Our_Response

The latest annual report from Joseph Rowntree Foundation and the New Policy Institute brings together the most recent data to present a comprehensive picture of poverty in the UK and who is experiencing it.

The headlines from this report will rightly concentrate on the staggeringly high numbers of those in in-work poverty. According to the report, over half of those experiencing poverty are in a family where at least one person is in paid work, a proportion that is rising. There are also alarming poverty rates amongst the disabled.

What might not be found in the headlines is some of the findings concerning Council Tax, debt and savings, issues that here at Toynbee Hall, we see cause people hardship on a daily basis.

The report found:

  • The most common bill for people to fall behind with is their council tax bill.
  • Over 8% of people in poverty are in Council Tax arrears. 5x higher than the level among those not in poverty.
  • In 2015 in the UK those in the poorest fifth of income distribution were spending a larger proportion of their income on Council Tax than everyone else.
  • In England in 2016/17 there will be 690,000 families on a low income who will pay at least £200 extra in council tax than in 2013.
  • The number of families paying this extra Council Tax has increase from 450,000 in 2013/14.
  • Council Tax takes three times as big a share of the incomes of the poorest fifth as it does of the richest fifth.

This reinforces our research that found that 37% of our debt clients from Tower Hamlets seeking advice already had Council Tax arrears – the highest number of any single debt type.

Due to funding cuts, councils are now considering reducing the Council Tax Benefit Support it currently provides. We strongly urge local authorities to reconsider the localisation of Council Tax Support – not least as this penalises the poorest, but it unfairly burdens the Local Authorities with the lowest income residents and therefore higher claimant numbers.

It’s also extremely worrying to read that 69% of the poorest fifth have no savings at all and 63% of families with children in the poorest fifth were unable to save £10 a month. This shows how much of a need there is to increase financial resilience.

Our Community Money Mentors programme has proven to increase financial capability and confidence by improving financial knowledge, money management skills and enhance saving habits. We hope that over the next 3 years, we will help more people across London manage their money and better mitigate the effects of poverty.

Read the Monitoring Poverty and Social Exclusion Report here

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