Half a million more people including children are living in poverty, as the number of low-income households reaches a record high.
Data from the Department for Work and Pensions (DWP) estimated that the number of people living in a relative low-income household after housing costs had risen to 4.5 million in 2018/19 from four million the year before.
It is the highest number of people living in poverty in the UK since figures were collated in 2002.
This includes an increasing number of children estimated to be living below the poverty line – which increased by 100,000 from 4.1 million to 4.2 million in the same time period.
Work and Pensions Secretary Therese Coffey said: “This Government is wholly committed to supporting the lowest paid families and has already taken significant steps including raising the living wage, ending the benefit freeze and increasing work incentives.
“All my efforts are currently focused on providing support to those affected by Covid-19, but we will not lose sight of our commitment to address and tackle the root causes to unleash potential.”
Coronavirus crisis could “worsen situation”
Charities have warned that the coronavirus crisis could worsen the situation for many families, and push many more over the poverty line.
With more than 500,000 people said to have applied for Universal Credit in just nine days, the charity Save the Children said more families will be left with little or no money during the five-week wait while their claims are processed.
Becca Lyon, head of child poverty at Save the Children, said: “Even before coronavirus, our country’s safety net was failing too many children.
“Now there’s a danger that even more children will fall through the net.
“The Government has already done a great deal to help families affected by the coronavirus crisis, but there is still more to be done.
“Families are already struggling and the five-week wait for Universal Credit payments will push them to the brink.”
This sentiment was echoed by Imran Hussain, director of policy and campaigns at Action for Children.
He said: “In the past week some families have already got so desperate, our frontline staff are feeding them from their own cupboards.
“And with so many families close to breaking point, we’ve had to launch an appeal fund to help those struggling to pay for basic essentials like food, nappies and utility bills.
“We welcome the financial support announced last week but the Government needs to go further and faster.”
Median average household income
The DWP found the median average household income before housing costs had decreased slightly last year, from £519 a week in 2018 to £514 a week, or around £26,800 a year.
The median average household income in 2018/19 before housing costs was £514 a week, or around £26,800 a year.
Meanwhile, figures released on Thursday show the average income after housing costs had flatlined at £447 a week, or around £23,300 a year.
Individuals with household income below 60 per cent of the UK average are considered to have “relative low income” – or to be living in poverty.
The Institute for Fiscal Studies (IFS) said incomes had already been stagnating for three years.
It warned that the impact of Covid-19 will reduce household incomes as workers lose their jobs, earnings fall and the stock market plummets.
Pascale Bourquin, research economist at IFS, said: “The current crisis will almost certainly result in a sharp, if hopefully temporary, fall in living standards.
“It comes on top of a desperately disappointing decade for living standards, and most recently three years of essentially stagnant incomes.”
He said that, while there were signs that income growth had picked up again in the current financial year, the coronavirus crisis will “abruptly put a halt to that recovery”.