Britain's soaring rental prices are pushing one in 8 workers into poverty

LONDON — Having a job won’t save you from poverty because rental prices are so high, wages are simply not enough to offset the high cost of living. 

One in every eight workers lives in poverty — 3.8 million people — according to a report by the Joseph Rowntree Foundation, a social policy group.

The number has risen by one million in 10 years because stagnant wages have not kept pace with the rising cost of private renting, the foundation said.

Helen Barnard, head of analysis at the Joseph Rowntree Foundation, said:

“The UK economy is not working for low-income families. The economy has been growing since 2010 but during this time high rents, low wages and cuts to working-age benefits mean that many families, including working households, have actually seen their risk of poverty grow.”

The total number of people living in poverty has doubled from 2.2 million in 2005 to 4.5 million this year, while half of children living in rented homes live in poverty.

“This report shows that people on low-incomes cannot rely on economic growth and rising employment alone to improve their financial prospects,” Barnard said.

Here are the figures: 

Prime Minister Theresa May has focused policy to help “Jams” — those who are “just about managing,” while Chancellor Philip Hammond tweaked tax thresholds and promised a spending boost in his Autumn statment to help out families.

The problem is exacerbated by high rental costs. Around three-quarters of those in the bottom fifth for income are spending more than a third of their monthly wages on rent.

More than half of people in poverty in England live in London and southern England, where rents are highest. London has the highest poverty rate at 27%, which is 6% above the UK average.

Here is the chart:

NOW WATCH: Martin Shkreli goes on a raging tweetstorm in response to high school students recreating his $750 drug for $2

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.