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What is the poverty threshold in the UK?

What is the poverty threshold in the UK?

Philippe Commaret, managing director of Customers at Big Six firm EDF, made the prediction just a day after Citi bank forecast that the price cap could sky-rocket to £4,567 in January, and inflation to 18.6 per cent.

Speaking on BBC Radio 4’s Today programme, Mr Commaret said: “We face, despite the support that the Government has already announced, a dramatic and catastrophic winter for our customers.

He added: “In fact, in January, half of the UK households might be in fuel poverty.”

EDF is set to contact hundreds of thousands of customers to offer them more support, including how to cut costs. Supermarkets are also set to stock more low-cost items, as well as advertising how to make savings, including using air fryers and slow cookers.

Here’s everything you need to know about the UK poverty threshold.

What is the poverty threshold in the UK?

Households are considered to be in poverty if their income is 60 per cent below the median equivalised income after housing costs for that year, according to Trust For London statistics.

Equivalisation means that households of different types have different poverty lines. Households considered to be in destitution are those who have to go without two or more essentials in the past month, because they can’t afford them, or if their income is extremely low (less than £70 a week for a single adult), according to statistics from the Joseph Rowntree Foundation.

Essentials are defined as having a home, food, heating, lighting, and clothing, as well as basic toiletries.

In 2018/19, the poverty line for a single person was £147 per week, whereas for a couple with two young children, it was £354, reports The Guardian.

How is poverty measured?

According to the House of Commons Library, various poverty measures based on disposable household income are in common use, and the trend can look different depending on the measure used.

Two commonly used measures are:

  • People in relative low income – living in households with income below 60 per cent of the median in that year;
  • People in absolute low income – Living in households with income below 60 per cen of (inflation-adjusted) median income in some base year, usually 2010/11.

Income can be measured before or after housing costs are deducted.

How many people are in poverty?

Around one in six people in the United Kingdom are in relative low-income households, before housing costs, which then rises to around one in five once we take into account housing costs, according to the House of Commons Library.

Some groups are more likely to be in poverty than others, and the latest reliable data for this is from 2019/2020.

In those years, households with a Pakistani or Bangladeshi head of the household were most likely to be in poverty, with those with a white head of the household the least likely.

Around 40 per cent of working-age adults in workless families were in relative poverty before housing costs in 2019/20, compared to just 11 per cent where one adult was in work.

While 46 per cent of social renters and 33 per cent of private renters were in relative poverty in 2019/2020, compared to 15 per cent of those who owned their own home, and 11 per cent of those with a mortgage.

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