More living in poverty than figures may reflect: Report
Thousands more people could be living in poverty than has previously been thought, a report published by the Joseph Rowntree Foundation has warned.
Poorer households have been harder-hit by the rising cost of basics over the last decade than those on higher incomes, but formal measures of poverty have not reflected this in their calculations, the research, which has been compiled by the Institute for Fiscal Studies (IFS) argues.
The report said that formal measures of change in poverty tend to assume that everyone feels the same impact of prices rising.
In recent years, the prices of goods such as food and energy that tend to take up relatively large chunks of the budgets of poorer households have risen at a faster rate than the cost of goods that have a greater impact on higher earners, such as mortgage repayments, motoring and leisure services.
The report estimates that if the harsher impact of inflation on lower income households was taken into account, around 300,000 more people could be living in absolute poverty, meaning that their income falls below a given standard of living. Between 2002/03 and 2013/14, households with incomes in the bottom fifth of the population have seen prices increase by 50%, while those in the top fifth have seen a more gentle increase of 43%.
Researchers found that energy costs take up around 8% of the budgets of the poorest fifth of households, but for the richest fifth just 4% of their budget goes towards energy.
The price of energy has leapt by 67% while food costs have surged by 31% between January 2008 and March this year.