Poverty Variations Across Generations
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Wednesday 22 May, 9.30-10.45am, Resolution Foundation offices, Westminster Poverty is an age-old problem, and one that we often assume is concentrated amongst the young and old. But the nature and timing of poverty varies much more than we think between generations and over the lifecycle. Understanding these shifts is crucial if we are to make the right interventions to reduce poverty throughout society. At what stage of one’s life is the risk of poverty greatest, and has this changed for different generations? Are specific groups particularly susceptible to certain drivers of poverty? And what are the most effective interventions to reduce poverty among children, pensioners and all other groups? In the run-up to the launch of the Intergenerational Centre in mid-June, which is housed within the Resolution Foundation and supported by the Nuffield Foundation, our analysts presented research on poverty rates across different generations, and explored how this has evolved over time. A panel of experts then discussed how we should understand – and reduce – poverty through an intergenerational lens, before taking part in an audience Q&A. Speakers John Hills, Professor of Social Policy, LSE Polly Toynbee, Columnist at The Guardian Fahmida Rahman, Researcher at the Resolution Foundation Torsten Bell, Director of the Resolution Foundation
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Poverty Variations Across Generations
- 1. May 19@resfoundation 1 New threats to an age-old problem How poverty varies across our generations and lifecycles John Hills, Professor of Social Policy, LSE Polly Toynbee, Columnist at The Guardian Fahmida Rahman, Researcher at the Resolution Foundation Chair: Torsten Bell, Director of the Resolution Foundation #poverty
- 2. 2 Poverty is typically highest for children and pensioners Proportion of people in relative poverty (after housing costs), by age: 1961-2017 @resfoundationSource: RF analysis of IFS, Households Below Average Income; DWP, Family Resources Survey
- 3. 3 Poverty is typically highest for children and pensioners Proportion of people in relative poverty (after housing costs), by age: 1961-2017 @resfoundationSource: RF analysis of IFS, Households Below Average Income; DWP, Family Resources Survey Higher income requirements Lower incomes
- 4. 4 The 1980s saw large increases in poverty for all ages Actual and projected proportion of people in relative poverty (after housing costs), by age-band: 1961-2017 @resfoundationSource: RF analysis of IFS, Households Below Average Income; DWP, Family Resources Survey; RF nowcast and forecast
- 5. 5 Poverty then fell from the mid-90s onwards, falling most for pensioners Actual and projected proportion of people in relative poverty (after housing costs), by age-band: 1961-2017 @resfoundationSource: RF analysis of IFS, Households Below Average Income; DWP, Family Resources Survey; RF nowcast and forecast
- 6. 6 Child poverty has risen in recent years, with further increases to come Actual and projected proportion of people in relative poverty (after housing costs), by age-band: 1961-2017 @resfoundationSource: RF analysis of IFS, Households Below Average Income; DWP, Family Resources Survey; RF nowcast and forecast
- 7. 7 No generation alive today has experienced the U-shaped life-course pattern Proportion of people in relative poverty (after housing costs), by generation: 1961-2017 @resfoundationSource: RF analysis of IFS, Households Below Average Income; DWP, Family Resources Survey
- 8. 8 No generation alive today has experienced the U-shaped life-course pattern Proportion of people in relative poverty (after housing costs), by generation: 1961-2017 @resfoundationSource: RF analysis of IFS, Households Below Average Income; DWP, Family Resources Survey Shift away from male- breadwinner households gives rise to income shocks for new parents
- 9. 9 No generation alive today has experienced the U-shaped life-course pattern Proportion of people in relative poverty (after housing costs), by generation: 1961-2017 @resfoundationSource: RF analysis of IFS, Households Below Average Income; DWP, Family Resources Survey Pensioner incomes have grown relative to working-age incomes in recent years Shift away from male- breadwinner households gives rise to income shocks for new parents
- 10. 10 Higher housing costs for lower-income households are a big driver of these shifts Before- and after-housing costs relative poverty rates at selected ages, by generation: 1961-2017 @resfoundationSource: RF analysis of IFS, Households Below Average Income; DWP, Family Resources Survey
- 11. @resfoundation • Overall growth in living standards means that absolute poverty is much lower than it was in the 1960s • Material deprivation grew post-crisis, but has fallen since 2012 - to below pre-crisis levels for over 40s • However, young adults in poverty are spending £26 per week less than they did at the start of this century – and a greater proportion on essentials 11 Of course, it’s not just about relative poverty…
- 12. @resfoundation 1. Income Distribution matters - Relative poverty went up for everyone in the 1980s 2. Economic growth matters - Absolute poverty falls fastest when growth is strong - determining how much we need support pensioner incomes to keep up 3. Social trends matter - Shift away the male-breadwinner model 4. Costs matter - Housing costs have pushed up poverty rates 5. The state matters - Social security has always combatted poverty - And its role need to change when other things change 12 …but a long view of relative poverty is essential to understanding and tackling it
- 13. @resfoundation 1. Income Distribution matters - Relative poverty went up for everyone in the 1980s 2. Economic growth matters - Absolute poverty falls fastest when growth is strong - Determining how much we need to support pensioner incomes to keep up 3. Social trends matter - Shift away the male-breadwinner model 4. Costs matter - Housing costs have pushed up poverty rates 5. The state matters - Social security has always combatted poverty - And its role need to change when other things change 13 …but a long view of relative poverty is essential to understanding and tackling it
- 14. @resfoundation 1. Income Distribution matters - Relative poverty went up for everyone in the 1980s 2. Economic growth matters - Absolute poverty falls fastest when growth is strong - Determining how much we need to support pensioner incomes to keep up 3. Social trends matter - Shift away from the male-breadwinner model gives rise to income shocks for parents 4. Costs matter - Housing costs have pushed up poverty rates 5. The state matters - Social security has always combatted poverty - And its role need to change when other things change 14 …but a long view of relative poverty is essential to understanding and tackling it
- 15. @resfoundation 1. Income Distribution matters - Relative poverty went up for everyone in the 1980s 2. Economic growth matters - Absolute poverty falls fastest when growth is strong - Determining how much we need to support pensioner incomes to keep up 3. Social trends matter - Shift away from the male-breadwinner model gives rise to income shocks for parents 4. Costs matter - Housing costs have pushed up poverty rates 5. The state matters - Social security has always combatted poverty - And its role need to change when other things change 15 …but a long view of relative poverty is essential to understanding and tackling it
- 16. @resfoundation 1. Income Distribution matters - Relative poverty went up for everyone in the 1980s 2. Economic growth matters - Absolute poverty falls fastest when growth is strong - Determining how much we need to support pensioner incomes to keep up 3. Social trends matter - Shift away from the male-breadwinner model gives rise to income shocks for parents 4. Costs matter - Housing costs have pushed up poverty rates 5. The state matters - Social security has always combatted poverty - And its role need to change when other things change 16 …but a long view of relative poverty is essential to understanding and tackling it
Editor's Notes
- Intro – The reports steps back to at changes in poverty rates over the past six decades – We take an in depth look at poverty over the life-course and how shifts in policy and economic circumstances have caused this to change over time for generations In the main we explore relative poverty, after housing costs – as we feel that this is the suitable measure to use when measuring poverty over the 60 year period. Of course, there are other measures – such as absolute pov and material deprivation – and we do mention but not in the same depth
- Explain chart and read off numbers Ice breaker
- As people have children – their incomes need to stretch further to support more people – pushing up costs Later life – as people stop working, in retirement, incomes drop – leading to these higher poverty rates This is a general pattern of poverty over the life course – but as I’m about to show – this doesn’t always stand. Economic and policy shifts play a large part in changing poverty rates
- Over the past 60 year we have seem a series of both shared and unique experiences for different age groups Historically pensioner poverty high Rising state pension relative to earning in 70s caused falls in pensioner poverty But in 1980s rising inequality pushed up for everybody – with particularly rapid increases for pensioners
- Don’t describe
- And in the recent period relatively flat but child pov is expected to rise – close to 35 Big part of driver is welfare-cuts for working age families with children Just showed the story over 6 decades for age groups as a whole – but what does this mean for generations
- Lots familiar with this – but just explain this for now Big inequality rise happened at different points in everyone's life – affected everybody Pensioner pov was huge issue for pre-war gens – fell in interim But rising inequality of the 80s means that Greatest gen in grey have higher rates than their predecessors the forgotten gen in blue
- More single parents and dual earning couple households Move to dual earner households is clearly positive news for living standards as household have higher incomes in general – but the need to reduce working hours when having children has lead to income shocks for new parents, meaning poverty rates go up And this puts more on pressure social security system to meet costs
- More employment income and stronger private pension income Lower productivity growth driving slower income growth for WA pop – meaning that in contrast social security systems had to do less to help pensioners keep up with rest of population
- Lots more things we can talk about but in view of time talk about what's been one of the biggest in recent period All charts so far have looked at AHC rates – but comparison AHC and BHC poverty rates highlights the role that housing has played in driving up poverty Explain chart – green BHC/ pink AHC. In almost all chases AHC pov rates are higher than BHC – HC puts more pressure on those with lowest incomes For later generations – reflects housing costs rising relative to incomes through 80s and 90s – which affected younger groups who weren't insulated by ownership by that stage Given current ownership patterns – the risk is that this isn’t just an age effect but also a cohort effect – our expectation is that the gap will open back up in later life (risk – younger gens won’t own in as greater number – gap carries through life with the)
- Won’t go into detail now – but interesting new analysis of spending patterns of younger in poverty groups – which finds that young people are now spending less than did nearly two decades ago
- On average, 18-29 year olds now spend £26 less per week than they did 15 years ago. (In contrast, those aged 65 and over are spending around £95 more per week) Between 2001-02 and 2017-18, the share of spending on essentials for 18-29 year olds in poverty grew by 16 per cent, from 45 to 52 per cent, and for 30-49 year olds by 13 per cent from 47 to 53 per cent.
- On average, 18-29 year olds now spend £26 less per week than they did 15 years ago. (In contrast, those aged 65 and over are spending around £95 more per week) Between 2001-02 and 2017-18, the share of spending on essentials for 18-29 year olds in poverty grew by 16 per cent, from 45 to 52 per cent, and for 30-49 year olds by 13 per cent from 47 to 53 per cent.
- On average, 18-29 year olds now spend £26 less per week than they did 15 years ago. (In contrast, those aged 65 and over are spending around £95 more per week) Between 2001-02 and 2017-18, the share of spending on essentials for 18-29 year olds in poverty grew by 16 per cent, from 45 to 52 per cent, and for 30-49 year olds by 13 per cent from 47 to 53 per cent.
- On average, 18-29 year olds now spend £26 less per week than they did 15 years ago. (In contrast, those aged 65 and over are spending around £95 more per week) Between 2001-02 and 2017-18, the share of spending on essentials for 18-29 year olds in poverty grew by 16 per cent, from 45 to 52 per cent, and for 30-49 year olds by 13 per cent from 47 to 53 per cent.
- On average, 18-29 year olds now spend £26 less per week than they did 15 years ago. (In contrast, those aged 65 and over are spending around £95 more per week) Between 2001-02 and 2017-18, the share of spending on essentials for 18-29 year olds in poverty grew by 16 per cent, from 45 to 52 per cent, and for 30-49 year olds by 13 per cent from 47 to 53 per cent.