More than 4,000,000 Brits are living in poverty despite record employment

'The labour market is trapping people in poverty, when it should be offering people a route out.'

Unemployment is at its lowest since 1974, but four million British workers on low wages are struggling to pay the bills and provide for their families.

The jobless rate has fallen to a record 3.8 per cent in the three months leading up to March but wages are not rising quickly enough to drag many families out of poverty.

Chancellor Philip Hammond said earlier this month he was ‘seriously considering’ making the UK’s minimum wage the highest in the world in a bid to tackle the ‘trap’ of in-work poverty.

But head of economics at the Joseph Rowntree Foundation David Innes told the Guardian it ‘really will not do that much to tackle the problem of in-work poverty.

He says insecure hours, higher housing costs and benefit cuts have contributed to the highest number of workers in poverty in 20 years.

He added: ‘The labour market is trapping people in poverty, when it should be offering people a route out.’

Pay rises are still outstripping the 1.9 per cent inflation rate, but the gap is shrinking.

Annual wage growth slowed to 3.2 per cent in the three months leading up to March compared to 3.5 per cent in December.

A report from the foundation said: ‘Rising employment alone is not delivering lower poverty. Rather, in-work poverty is increasing faster than employment.

‘Many workers are caught in the middle of a series of moving currents; stuck in low-paid work, with little chance of progression, subject to high housing costs and using a weakening social security.

‘It is these factors combined, that are driving an unprecedented rising tide in poverty among working parents.’

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Figures from the Department of Work and Pensions published in March showed no rise in household income between 2017 to 2018, putting 30 per cent of British children below the poverty line.

Think tank Resolution Foundation said 70 per cent of children living in poverty are in working families.

A Government spokesman said: ‘Tackling poverty will always be a priority for this Government, and we take these numbers extremely seriously.

‘Employment is at a record high, wages are outstripping inflation and income inequality and absolute poverty are lower than in 2010.

‘But we know some families need more support, which is why we continue to spend £95 billion a year on working-age benefits.

‘We are looking at what more can be done to help the most vulnerable and improve their life chances.’