Breaking the Poverty Cycle

Poverty is not the result of someone’s bad luck or poor decisions.

While life events, such as illness or a family crisis, can contribute to someone’s financial hardship, the root causes of poverty are often embedded in our society’s very structures and systems. Rising living costs, stagnant wages, and heightened rates of insecure employment have compounded these challenges and trapped people in a vicious poverty cycle.

Today, in the UK, one in four people is in poverty. Of those affected, 16 million people in the UK live in impoverished families. 5.2 million are children, 9.2 million are working-age adults, and 1.5 million are pension-age adults. Most people in poverty (62%) live in a household where someone works at least part-time.

In-work poverty

In-work poverty (or working poverty) has been a growing issue in the UK since the mid-1990s. Generally, it happens when a working person’s income, after accounting for housing costs, falls below 60% of the national average, leaving them unable to meet the cost of living. In-work poverty directly challenges our idea of a meritocratic society where hard work is expected to ensure a good quality of life.

In-work poverty directly challenges our idea of a meritocratic society where hard work is expected to ensure a good quality of life.

It’s an involved issue. In-work poverty is not limited to those in the lowest-paid jobs. Factors such as industry, working hours, and location, along with individual characteristics like age, gender, ethnicity, and disability, all contribute. For example, poverty rates are higher for families from racialised backgrounds. More than half (8.7 million) of all people in poverty live in a family that includes a disabled person.

Challenges related to childcare, health and wellbeing, and transportation access further exacerbate in-work poverty. These essential needs consume a significant portion of income and energy and can also limit people’s opportunities. Research has shown that in-work poverty can contribute to increased absences or lateness due to practical barriers: insufficient funds for a train fare to get to work, or taking time off because you can’t afford childcare.

The impacts of working poverty are pervasive. It can mean that someone goes without basic needs like food, proper clothing, or heating – or has to choose between them. Some people may have to rely on food banks or the generosity of friends and family. Others find it impossible to save for emergencies or the future, or can’t afford social and leisure activities, leading to isolation and loneliness.

The “Poverty Premium”

There is a concept known as the “poverty premium“, a system that essentially penalises low-income people by forcing them to pay more for essential goods and services, such as food and utilities. They may have to rely on expensive pre-payment meters for utilities, cannot afford to purchase items in bulk, or lack access to supermarkets that offer cheaper options. People in these situations can resort to payday loans, high-interest financing, or “buy now, pay later” schemes to cover basic, immediate needs, leading to even higher costs and debt down the line.

“Poverty Premium” is a system that essentially penalises low-income people by forcing them to pay more for essential goods and services, such as food and utilities.

All these factors work together to effectively catch people in a cycle of poverty that’s incredibly hard to break. The likelihood of escaping it varies widely. Those born into poverty – or low-income households – are the most at risk of being trapped. Children growing up in challenging conditions are more likely to experience life disadvantages and increased odds of perpetuating the cycle of poverty for another generation.

Limited access to quality education, lower qualifications, and reduced employment opportunities often lead people towards low-paying jobs or insecure contracts. Those under financial pressure are four times more likely to suffer from both depression and anxiety. Poverty can also lead to sleepless nights, distractions at work and a general lack of productivity, which drains employee stamina and morale.

Think about it. Trying to survive under these conditions day after day, with no relief in sight, is exhausting. It makes it incredibly difficult for people to improve their situation or reach their full potential. Those in employment may see the effects play out in their job performance and the damage to their physical and mental health, further hindering their overall productivity and economic mobility. Research repeatedly shows that the negative impact that feelings of low status – financial or otherwise – can have on someone’s wellbeing.

Those born into poverty – or low-income households – are the most at risk of being trapped in poverty.

Poverty and Big Issue North

At Big Issue North, we meet many people who are caught in this cycle. They are often deeply familiar with the barriers that can keep them from escaping poverty. They know about financial insecurity and not having affordable housing. They struggle to access transport, healthcare, and mental health services.

As a social enterprise in the business of changing lives, we work to create opportunities for people who have the least. We provide the means for anyone who needs it to earn a legitimate income by becoming a Big Issue North vendor, selling the Big Issue magazine. Working on designated pitches in their local area, Big Issue North vendors keep 100% of the profit from every magazine sold.

To become a vendor, you do not need a permanent address, ID, bank account, qualifications, or previous work experience. There is no time limit or restrictions on how often someone can sell the magazine.  We operate under the premise that everyone deserves the right to earn an independent income at any time, and we make the process of becoming a vendor as straightforward and efficient as possible.

This is because those who come to us looking to sell the magazine are in real, immediate need. Many of them are worried about keeping a roof over their head and paying their bills. They have often face multiple barriers to alternative, more traditional forms of employment.

Two-thirds of vendors do not speak English as a first language. One in 10 have been in care, and one in five have been in prison – often due to experiencing poverty and homelessness. Three-quarters have no formal qualifications; the same number have no work experience; a quarter do not have a bank account; a fifth are disabled; and a sixth struggle with addiction. Our latest vendor audit revealed that 29% of vendors had used a food bank, and 30% had used soup kitchens.

At Big Issue North, we meet many people who are caught in the poverty cycle. They are often deeply familiar with the barriers that can keep them from escaping poverty.

Dave was a vendor in Altrincham before he died in 2022. He sold the magazine on and off for several years. He would often reflect on his experience of addiction, homelessness and begging before becoming a Big Issue North vendor: “I was begging for a while, and that’s not me. I was desperate, I suppose… I just got stuck in a rut, and it was hard to get myself out of it. It feels great to be selling the magazine again; it’s a lot better. It’s a pride thing. I understand why people beg, but I prefer not to… It’s better to be standing up than sitting down.”

It can mean more than just earning money. As Dave points out, being a vendor can significantly enhance a person’s self-esteem and provide a sense of pride, which is often diminished by poverty, feelings of low status, and other challenges. By selling the magazine, vendors enjoy the dignity of earning a living instead of depending solely on charity or spare change from people passing by.

We are not naive. While the efforts of organisations like ours may help some in our community, the broader issue of poverty in the UK requires systemic change. The welfare system must support people in work and those looking for work adequately. Secure, well-paid jobs must become more accessible. A minimum wage must cover living costs.

Support services working with people dealing with addiction, mental health struggles, or incarceration must be better funded and more accessible to aid recovery and rehabilitation. We must recognise that issues such as substance misuse and criminality are rarely standalone – they are often symptoms of deeper problems, such as trauma, poverty, or social seclusion. Addressing issues in isolation without tackling their underlying causes leads to cycles of recovery and relapse. Providing comprehensive support that includes mental health services, stable housing, and community integration is essential.

Additionally, expanding access to education and training is crucial. It’s not enough to provide opportunities; they must be genuinely accessible to everyone, regardless of their background or circumstances. This includes offering flexible learning options for those juggling education with work or caregiving responsibilities and ensuring that qualifications lead to meaningful, well-paid, secure employment.

Breaking the cycle of poverty requires a long-term commitment to changing the systems that trap people in hardship. Challenging the status quo will take a collective effort, systemic change, and courage. In the meantime, we remain dedicated to providing opportunities and support for people like our vendors – those caught in the cycle of poverty – by offering them a way to work and earn an immediate income.

About Big Issue North and our vendors:

The Big Issue North Trust is a registered charity (charity number 1056041) working across the north. We are a social enterprise in the business of changing lives, creating opportunities for people who have the least, including those who are experiencing poverty. We provide the means for anyone who needs it to earn a legitimate income through selling the Big Issue magazine.

To further support people to improve their lives, the Trust also raises funds to provide a range of support for vendors, including help with accessing services, welfare checks, help getting ID, home furnishing packages, breakfast clubs and more. To learn more or donate, visit bigissuenorth.com