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Making Sense of Poverty in the UK


Who We Are Al-Mizan Charitable Trust is a grant-funder that supports disadvantaged families and deprived communities across the UK, regardless of their faith or cultural background. Although the UK is the seventh richest country in the world, more than 8 million people live in poverty. Families up and down the country are regularly forced to choose between buying food or switching on the heating, paying for travel to the hospital or doing the laundry.

Our goal is to confront disadvantage—we recognise that poverty is not just about food and shelter, but also the inability to access opportunities that break the cycle of disadvantage from one generation to another. We do this by providing grants and interest-free loans of up to £500 to families for housing, training and employment opportunities as well as in-kind donations of food, clothing and toiletries to needy people.

As a Trust, we are continually balancing our funds between immediate need and sustainable investments in people’s lives. Through a measured approach we meet the needs of those in crisis today as well as the aspirations of future generations.

Core Values Accountability: We consider every donation, large or small, to be a pact between us and the donor, which is based on trust and a mutual responsibility to those in need. We scrutinise every expense to ensure that your donation is spent wisely in combating disadvantage, deprivation and poverty. Compassion: We approach every needy person with a sincere desire to better understand the plight of people who are suffering and offer them the best possible support in order to better their circumstances.

Confidentiality: We recognise that asking for help is not easy and we promise to respect anonymity. We never disclose any details concerning anyone’s situation to any third party, without their permission.

Equality & Fairness: We value the diversity of all humankind and we pledge to ensure that our policies and procedures do not discriminate on any grounds. We invest in the betterment of all society, irrespective of creed, culture or personal circumstances.

Sustainability: We believe in sustainable charitable giving, ensuring that your donation makes a lasting impression on people’s lives.


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a s s e M ’s r e d n Fou

Only ten years ago it would have been farcical to speak of hunger in the UK. Today it’s a reality for over 750,000 children who often go to bed on an empty stomach. We are all familiar with high profile stories of famine, war and affliction. With these major disasters we slowly build stereotypical images of what suffering looks like, and indeed, what poverty should look like. It may be difficult to draw parallels between images of malnourished children growing up in a slum village and scruffy children living on an innercity council estate, but there is a common poverty which limits the opportunities and aspirations of these children, continents apart.

It’s not that one poverty is more abject that another, it’s just that their relative poverty appears different in our eyes.

So much of what Al-Mizan Charitable Trust does on a daily basis, challenges our preconception of poverty. Day after day we receive countless stories of extreme hardship, which no one with a compassionate conscience would dare to ignore. Whilst many are accessing specialist welfare services, they are restricted by their financial situation which in turn limits their prospects for the future. Economic stability requires more than personal commitment and self-exertion. It actually costs to break the cycle of poverty.

In this day, we can no longer hold faith in a decapitated welfare system where benefit payments belie the real cost of living. In the last 6 years, the average grocery bill has increased by 25% whereas increases to benefits have staggered far behind. Welfare payments are not a safety net but a token contribution to need, and we, as members of society, now carry additional responsibilities. Al-Mizan Charitable Trust offers us that opportunity—to fulfill our duty to our neighbours and challenge suffering in our own communities. After all, charity begins at home.

I am grateful to Ali Khimji, who has authored this short pamphlet on “Making Sense of Poverty in the UK”. I hope that it will go far in creating a better understanding of what it means to live at the margins of society and inspire us all to work for those in need of our help. Mohammed Mamdani Founder and Director


e UK?

ty in th r e v o p e v a h Why do we

Despite the UK being the seventh richest country in the world, it happens to be one of the most unequal in income and wealth distribution. Before the financial crisis of 2008, the economic prosperity that Britain enjoyed was not shared amongst its people, and has lead to a situation where the poorest 10% of people receive only 1% of the country’s total income, while the richest 10% are treated to 31% of it. The stark contrast between the rich and the poor is also evident in the measure of household wealth. The total household wealth held by the richest 10% of people in the UK was just under £2 trillion in the years 2008-10, whereas the poorest 10% had only £6 billion. Today, we are in a situation where millions of people in the UK live in poverty. Previously poverty was something we would have associated with the developing world, but the sheer reality is that there are families in the UK who cannot afford to eat, have nowhere to sleep, and are constantly having to make difficult financial decisions.

Poverty is much more than not being able to afford goods and services. People who live in poverty are excluded from civic engagement, politically, socially and culturally. They are stripped of their dignity, which in itself debilitates their progress and advancement. They do not have access to the skills and opportunities that allow them to improve their lives, because all of their energy is focused on simply surviving from one day to the next.


Welfare cuts and reforms will make life extremely difficult for the poorest in our society over the next few years. The government’s strategy of separating people into “strivers” and “skivers” based on whether they need welfare support has only served to demonise the poor and alienate those who are in genuine need of assistance.

Who ends up in poverty?

Poverty is indiscriminate, but there are some common profiles:

Job-Seekers: Official figures show that unemployment has risen to 2.52 million in the UK, with youth unemployment at 993,000. A 24-year-old graduate who is unemployed is forced to survive on £56.80 per week. Without family support, which is often taken for granted, it’s impossible to cover basic living costs. Low-Paid Workers: There are 10.1 million people in the UK, around 20% of the work-force, who receive low incomes close to the minimum wage, earning less than £13,000 per year. Often lacking opportunities for further training and development, low-paid workers juggle multiple jobs, and are only eligible for minimal benefits. They struggle to cover basic costs such as replacing a broken cooker or regular medical prescriptions. Socially Deprived: People who suffer from a long-term illness or come from a troubled domestic background find it more difficult to find work in a competitive environment. Lacking stability in their own lives, and with physical limitations, they cannot afford to retrain into more suitable professions and are left with little alternative to a life on benefits. Minority Ethnic Groups: There is a strong correlation between ethnicity and poverty. In Britain, 40% of ethnic minorities live in poor households, as opposed to 20% of the mainstream community. Single Women: Female lone parents are more likely to be in a low-income household, because a mother is unable to work if she is looking after her children.

Pensioners: It is estimated that one in six pensioners live in poverty in the UK, and are unable to afford basic utility costs.

The Redundant: An increasing number of middle-class professionals with mortgages suffer redundancy and find it difficult to find alternate employment quickly. Within months, the family can default on payments and suffer eviction. Unfortunately, the old myth that poverty is a life-choice or self-imposed because of idleness, continue to persist. Regardless, benefit dependency is no longer, if it has ever been, a comfortable existence, and there is little impartial evidence to support this claim.

Even though the struggles of many poor people are very real, the media and general public are quick to perpetuate this myth through marginal examples, concluding that their suffering is a result of their own inaction. The latest edition of the British Social Attitudes Survey reaffirms this, with one in four people attributing poverty to ‘laziness’ and 38% of those surveyed considering poverty to be an inevitable part of modern life.


e t a t S e r a f l The We

The modern welfare state has its beginnings in the 1940s with the publication of Lord William Beveridge’s conspicuously titled report “Social Insurance and Allied Service”. However, the first signs that Britain would adopt a state-provisioned welfare system came in 1906 with the Liberal Welfare reforms, which included free school meals, state pensions and free medical treatment for workers.

During the Second World War, the government asked Lord Beveridge to compile a proposal for a comprehensive welfare system that can reach those who were most in need in society. In 1942, Lord Beveridge presented a report to Parliament which established the principle that the state should assist individuals through times of difficulty, as well as help to distribute resources fairly across society through a system of taxation that paid for health services, education and housing. Through this intervention the objective was not only to reduce poverty but also unemployment. Lord Beveridge envisaged a state where citizens would contribute to a universal system through national insurance payments according to their capacity, allowing them to make full use of its services depending on their needs. His proposals were put forward with the view of fighting the five ‘Giants Evils of Want, Disease, Ignorance, Squalor and Idleness’. However, since the foundations of the welfare state were laid, some of Lord Beveridge’s best intentions have failed to materialise. Rather than instating a welfare system that provides a root out of poverty through training, development and personal enterprise, we have inherited a system that offers financial support, but without tangible opportunities to break the cycle of poverty.

Welfare Cuts—What’s Changing? When the coalition government came to power in 2010, the first item on their agenda was cutting the budget deficit. Rather than opting for a more equal distribution of wealth by increasing opportunities for economic prosperity, the government have promoted a one-sided policy of cutting welfare payments. Additionally, welfare reforms include privatising the NHS, restricting legal aid and closing libraries, all of which directly or indirectly lower the quality of life for the most disadvantaged across the UK.

The welfare reform programme is made up of many small changes to the system, but there are five major policies that came into effect at the start of April 2013. As a result poor families will receive £2.3 billion less in 2013-14 than in previous years.


Benefits Cap: Benefits for couples and single parents will be limited to £500 per week, or £350 per week for single adults. Research by The Children’s Society has estimated that 27,600 adults and 82,400 children may become homeless, because the benefits cap does not distinguish between higher rent costs in some parts of the UK. Benefit Rises: In January, MPs approved plans to cap annual benefit increases at 1%. Previously, benefits had gone up with inflation and would have increased by 2.2% this year, but it now means that those on benefits will be worse off each year as inflation rises. In particular, food, fuel and transport prices generally rise faster than inflation, so people on benefits will struggle to afford essential living costs. This will affect nearly 9.5 million families, including 7 million in work, by £165 a year.

Universal Credit: A new monthly payment will replace Income Support, Jobseeker’s Allowance, Employment Support Allowance, Housing Benefit, Child Tax Credit and Working Tax Credit. By the government’s own estimates, more than 2.8 million households will be worse off. By replacing fortnightly payments, it will also take longer to sign-on for benefits leaving families stranded for up to two more weeks without money whilst payments are processed. Bedroom Tax: Housing Benefit claimants who are not using all the bedrooms in their home will see a cut in their benefit. Even when families choose to move to a smaller house, they will be liable for the tax whilst they wait to be allocated a new property. In North England, families with spare rooms outnumber overcrowded families by three to one—the new tax will serve no housing policy, but simply create a new income stream for government.

Council Tax Benefit: Previously, the Department for Work and Pensions administered Council Tax Benefit nationally, but it will now fall on local councils to arrange subsidies for Council Tax. In addition, central government will only be providing local councils with 90% of what was used to cover Council Tax Benefit, so each council will have to find the shortfall from elsewhere.

Aren’t most benefit claims fraudulent? The media is keen to propagate the myth that the UK is full of workless households and a culture of welfare dependency has been inherited down the generations.

Recently, the Trades Union Congress undertook research that illustrated the extent of the media’s influence. The polls showed that whilst the general public thought that 41% of the welfare budget was spent on unemployment benefits, the real figure is no more than 3%. Additionally, people believed that 27% of the welfare budget was claimed fraudulently, but in reality only 0.7% of claims are dishonest.


Child Poverty In 1999, Former Prime Minister Tony Blair made a pledge to halve child poverty by 2010 and eradicate it completely by 2020. Only years away from this aspiration, there are an estimated 3.5 million children living in poverty in the UK, and this is expected to rise to 3.9 million by 2015 if the current situation doesn’t change.

Child poverty is the result of parents not being able to provide for all the basic needs of their children. Interestingly, the British Social Attitudes Survey revealed that two out of three of those surveyed believe that children are living in poverty because one or both of their parents don’t want to work. In contrast, the Joseph Rowntree Foundation discovered that in 2008, for the first time, 58% of children in poverty were living in households where at least one adult was in work.

Numerous studies have shown that if a child is living in poverty, they are more likely to have low educational attainment at primary and secondary school. In fact, out of the poorest 20% of children, only a fifth will get five GCSEs at grade C or above, compared with 75% from the richest 20% of children.

Resources and facilities around the house can also be restricted, and a recent study has shown that in the poorest households, 29% of children have no computer and 36% have no access to the internet. This can affect their homework, and with libraries being closed around the country, they will be left behind by many of their peers at school.

How bad is it for some families? According to a recent survey by Save the Children: • Over half of parents in poverty say they have cut back on food, and over a quarter say they have skipped meals in the past year; • Around 1 in 5 parents can’t afford new shoes for their children when they need them; • Over 64% of children in poverty say they are missing out on things many other children take for granted, such as going on school trips and having a warm coat in winter; • 4 in 5 parents living in poverty say they have had to borrow money to pay for essentials, such as food and clothes, in the past year.


Disabled Children Four in every 10 disabled children live in poverty in this country, which amounts to around 320,000 children. Out of these, more than a third live in severe poverty. Families with a disabled child are more likely to be in poverty because one of the parents may have to forego work to care for the child. In single-parent families, there is no prospect for the parent to work and living off state benefits is the only option for survival. Here, the benefits system must meet all necessary living costs or put either or both the parent and the disabled child at risk of severe poverty.

It is estimated that it costs an additional £99.15 per week to bring up a disabled child, but the current benefits system does not provide enough to cover this outlay. At the moment, families with a disabled child receive support through Child Tax Credits, which is around £57 per week. Under the new scheme of Universal Credit, this support will be cut to just £28 per week, which is equivalent to a loss of £1500 per year. The end result will be desperation for families already under pressure. Families with a disabled child face substantial additional costs such as specialist aids, adaptations to their homes, additional clothing and travel costs. It is estimated that around one in five families spends more than £50 per week on aids and adaptations for their disabled children, such as adjustable beds, specialist toilets, specialist cutlery and appropriate toys. Disabled children also need special equipment and resources to stimulate their learning and personal development. The Children’s Society has surveyed affected families. With £30 less in benefits per week two-thirds of respondents said they would cut back on food expenditure, and more than half said they would have to take out loans to cover the shortfall.

Samuel’s Story Samuel is a 13-year-old boy living in Birmingham, and is the fourth eldest of six children. One of his older brothers is blind, and his youngest brother is autistic. Samuel helps to care for both brothers, but is dyslexic himself and often has trouble concentrating in school. He has nowhere to study at home and his parents are worried that if he doesn’t do well in school, he will fall into a bad crowd. After reviewing his case, Al-Mizan Charitable Trust awarded Samuel a grant of £300 towards a laptop to help with his schoolwork.


Layla’s Story Layla contacted Al-Mizan Charitable Trust for help when she had just moved into a hostel after escaping her violent husband. Twenty-four-year-old Layla is a refugee from war-torn Congo. At the age of 15 years, she was gang-raped by a militia group as a punishment for her family’s refusal to take part in the partisan conflict ravaging the country. A year later, her village was attacked by a rival militia and most of her family were killed. She fled with her grandmother to the UK to begin a new life.

Arriving in the UK, her application for asylum took 3 years to process, during which time she lived with her grandmother in a bed-sit reliant on food hand-outs from a local church. After she received her papers, she married a Muslim man, in the hope of a better life. Sadly her grandmother passed away and she had to borrow £3,000 for her funeral costs. Without the support of her grandmother, her husband took advantage of her isolation. He started drinking heavily and beat her regularly with his belt, leaving her bruised and in tears. Sometimes he raped her.

After becoming pregnant, she left her husband, afraid that he would harm her unborn child. She took refuge in a hostel, and the upheaval and daily stress caused her to have a miscarriage. Layla works as a cleaner 25 hours per week, earning just £157.75. She struggles to meet her basic living costs whilst having to pay back the loan for her grandmother’s funeral. She often has to forgo meals and desperately needs new clothes and a warm coat.

Layla still hopes for a better future. She wants to go to college to improve her English, but government subsidies have now been cut. She applied to Al-Mizan Charitable Trust for £200 to cover the cost of the course and her travel expenses.


Layla’s Weekly Expenses “This a breakdown of Layla’s weekly costs. Of course it doesn’t work out perfectly every week, and Layla finds herself struggling to keep to budget, as anyone would in her situation. When she falls short, inevitably she has to cut back on the few costs which are flexible—food, personal hygiene and household costs. She never has any money left over for emergencies, pursuing education or improving her life prospects.” Grants Officer, Al-Mizan Charitable Trust

1 2 3 4

£6.31/hour for 25 hours per week A mobile phone is important for me, as I need it for work to contact me, and for emergencies. I also buy a £5 phone card each work to call my only living relative in the Netherlands. I need a full weekly bus pass to get to and from work. It would take half as much time on the tube, but I cannot afford a full travelcard. When my grandmother passed away, I had to borrow money for her funeral costs. I have to pay back £200/month to the lender.


r Working Poo When it comes to solving poverty, the government is quick to highlight employment as a sure route out of difficult times. A growing section of society is now considered to be a social group of its own—the ‘working poor’. These are families who have jobs, but are paid no more than the minimum wage. Unable to access most benefits, they struggle to meet everyday costs and often turn to pay-day loans to cover any shortcomings. Generally, they work in cleaning, catering, retail, manufacturing and hairdressing. There are 10.1 million adults on low-to-middle incomes, who make up around 20% of the workforce in the UK. Despite their strong work-ethic they struggle to survive because of their restricted income.

These families would not qualify for a mortgage or be able to raise sufficient funds for a deposit. Unable to access social housing they must pay commercial rental prices. They are unable to save funds to deal with life crises such as funeral costs or replacing broken appliances. Paying for regular medical prescriptions becomes a chore. School trips become a luxury rather an integral part of a child’s learning and development.


The working poor often find themselves in jobs with uncertain hours of work, lack of job security and few opportunities for training and development. They are quite literally stuck in a cycle of low-paid work.

Maintaining a job is an expense in its own right. The average worker in the UK spends £1,843 per year on costs relating to their job such as food, travel, childcare, equipment and clothes, with some London workers spending up to £3, 561 per year.

Can you survive on minimum wage? The Joseph Rowntree Foundation has calculated the Minimum Income Standard, which is considered to be the cost for an acceptable standard of living in Britain today. It includes the cost of food, clothing and shelter, as well as other costs related to maintaining a dignified existence in society. The minimum wage for an adult in the UK is £6.31 per hour (as of October 2013). Family Type

Minimum Income Standard (per week) Income & Benefits (per week) Balance

A 24-year-old Single parent Couple, 1 parent single male, working part-time, working full-time, working full-time with one child with two children £257.13

£382.29

£559.47

£220.85

£314.41

£442.89

-£36.28

-£67.88

Jennifer’s Story Jennifer was working as an office administrator until last year when she was made redundant. She struggled to pay her bills and support her two young sons, and when she was unable to pay the rent one month, they were kicked out of their flat. The family moved from bedsit to bedsit until the council was able to provide them with an unfurnished flat. Jennifer was also able to find part-time work at a local community centre, but the money she had saved was not enough to buy new furniture. Her sons were sleeping on the hard floor and without a cooker or freezer, they were unable to eat properly. Al-Mizan Charitable Trust provided Jennifer with a grant of £250 towards household goods.

-£116.58


Food Poverty Every week in the UK, three new food banks are opened. A food bank is a place where people who are struggling to pay for food can go to pick up donated food items. Over the Christmas period, the Trussell Trust, who operate a network of 250 food banks across the UK, fed 15,000 people, double what they fed last year.

In 2011-12, food banks fed nearly 130,000 people across the country, and this number is expected to rise to 230,000 for 2012-13. What is most surprising about food banks is that there is generally a peak of visitors at 5:30pm, as people pass by on the way home from work, indicating that Britain’s hunger problem affects more people than just the unemployed. One of the main reasons for people struggling to feed themselves is the rise in food prices. The government’s Family Food survey showed that weekly spending per person on household food in 2011 was £27.99, which was an increase of 1.5% on the previous year. However, this figure actually represented less food than in previous years, 4.2% less in 2011 than in 2007. Households would often cut out spending on fresh fruits and vegetables and opt for unhealthy, cheaper items instead.

Children are hit worst by the food crisis. For some, a free school dinner is the only hot meal they will have all day, which means they suffer during the school holidays. A recent London Assembly survey showed that at least five London school pupils in every class start the day hungry, and 61% of the teachers surveyed had fed hungry children out of their own pockets. When a child is hungry, it can affect their concentration in school, as well as lead to fainting in class.

Davit’s Story Davit came to this country in 2001 and found work as a cleaner. After a few years, he trained as a bricklayer and worked in new housing developments. When the market crashed, he struggled to find work and had to use his savings to support his wife and children. He took out loans and his bills have been piling up as he still can’t find work. When he came to us for help, his family hadn’t eaten a proper meal in two weeks and had been living off canned food. Al-Mizan Charitable Trust provided Davit with a grant of £200 in food vouchers.


Fuel Poverty Over the winter period, one in four families was forced to choose between heating and eating. Their low incomes and lack of savings made it impossible to be able to afford both at the same time.

Fuel poverty is where a household needs to spend more than 10% of its income on fuel to keep the house adequately warm.

In the UK, it is estimated that 5.5 million households are affected by fuel poverty. Insufficient heating in a house also leads to thousands of unnecessary deaths each year.

Rising energy prices are a constant presence in the news and researchers have calculated that for every 1% increase in energy prices, about 40,000 households are pushed into fuel poverty. Recent reports suggest that energy prices went up by 7% over the last year. In January, Ofgem launched the Energy Company Obligation, where energy suppliers had to help cut fuel bills of poor households by offering them solid wall insulation and energy-efficient boilers. However, this measure will add £116 to the average fuel bill and will only help between 125,000 and 250,000 households out of fuel poverty by 2023.

Age UK suggests that it costs the NHS around £1.36 billion to treat people affected by lack of heating in their homes each year. Living in a cold home can worsen the effects of allergies, asthma and other respiratory illnesses. It can also increase blood pressure, which in turn increases the risk of heart attack and stroke.

Nicola’s Story Nicola used to work as a call centre manger until she was diagnosed with cancer. The treatment took its toll and she was unable to return to work. She lives with her two daughters, but they struggle to pay their bills as only one of them works whilst the other is in full-time education. When winter began, Nicola had no money to fill up the oil tank for her heating and water, and the family was left in freezing conditions. Al-Mizan Charitable Trust awarded Nicola with a grant of £400 towards heating oil.


Al-Mizan Charitable Trust is a grant-funder that supports disadvantaged people and deprived communities across the UK, regardless of their faith or cultural background. Address: 2 Burlington Gardens London W3 6BA

Telephone: 020 3667 2756

E-mail: admin@almizantrust.org.uk Website: www.almizantrust.org.uk Registered Charity No. 1135752 fb.com/AlMizanTrust

@AlMizanTrust


Making Sense of Poverty in the UK