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In Work Poverty

When a working person’s income, after housing costs, is less than 60% of the national average, they don’t earn enough to meet the cost of living – they are living in poverty*.

In the UK, this already affected one in eight workers before the current cost of living crisis emerged.

A combination of factors can make it difficult for many working people to escape poverty:

  • Low income, with pay rises failing to keep up with the rising cost of living.

  • A lack of genuine, two-sided flexible working practices that enable people to fit their work around their caring responsibilities and health needs.

  • Underemployment (where people work insufficient hours to cover their cost of living).

  • Financial hardship caused by unforeseen setbacks in personal circumstances, such as relationship breakdown, bereavement or illness.

  • The ‘poverty premium’ which traps those on lower incomes in a cycle where they pay more for goods and services

The current cost of living crisis in the UK has made financial wellbeing an issue that employers cannot ignore. We at Glen, are not clear on the size of this issue, but in-work poverty is not a new problem.

UK households are in the midst of an enormous-cost-of living challenge. Inflation rates are at their highest in decades, and individuals and business are all feeling the impact of soaring energy, food, housing, and transport costs. But those on the lowest incomes will be hit the hardest.

According to the Joseph Rowntree Foundation, low-income families are living through a ‘frightening year of financial fear’, with many falling behind on bills, going without essentials, or taking on high-interest debt.

The National Living Wage at 6.6% rise in April 22 had failed to protect before the crisis emerged.

According to The Institute for Fiscal Studies, workers who earned £30,000 in April 2021 needed to see their wages grow by more than 7% to maintain the same standard of living a year later.


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