New data shows rise in poverty with more action needed

Poverty levels have increased slightly during the first year of a Labour government, new data from Households Below Average Income (HBAI) shows.

Half a million more in poverty

Comparisons between data gathered between 2023/24 and 2024/25 show that half a million more people are living in poverty. This amounts to around one in five people (20%), or 13.4 million.

The data further reveals there are 5.5 million families living in poverty where one person has a disability, or 4 in 10 of all people in poverty. 4 million children are also living in poverty.

Pensioner poverty has also increased. This follows one of the most controversial policies announced by Labour when it entered office in 2024: its cuts to Winter Fuel Payments. In 2025, the government u-turned on the decision. Nevertheless, there been an increase of 200,000 pensioners living in poverty.

London and Wales worst affected

Poverty is highest in London and lowest in the North of Ireland.

Both London and Wales have seen increases in overall poverty and child poverty. Meanwhile, the West Midlands and South West have seen reductions.

The number of people with very low food security has also fallen overall, but 3.1 million people still went hungry because of a lack of money. This figure remains over 40% higher than it was in 2021/22.

Household incomes have risen on average over the last year, both before and after housing costs. However, they have fallen further for those on incomes already in the bottom 10%, remaining below 2021/22 levels.

Peter Matejic, chief analyst at the Joseph Rowntree Foundation, said:

The latest statistics show overall poverty rose slightly and there was little change in child poverty in the first year of the Labour government.

We expect to see the number of children growing up in poverty fall as a result of the government’s decision to remove the two-child limit from April 2026. That will mark a much-needed improvement, but our projections show progress flatlines after that and more will be needed to make sure child poverty continues to reduce.

The bottom line is that far too many families are still in poverty.

A change in method

The HBAI has changed its method for gathering data from survey responses to administrative data. This is deemed to be more accurate and represents the most significant change in method for a generation.

Better measurements may help quantify the scale of the issue, but they do nothing to improve anyone’s situation.

People living on a low income in the UK continue to struggle to afford the essentials. The Canary recently reported on new research by the Social Workers Union, which revealed many social workers are paying for basic essentials out of their own pockets to help their service users.

Food bank use also remains close to record levels, with many continuing to experience the stigma and trauma of living in poverty.

Featured image via the Canary