New HBAI data shows rises in food insecurity and child poverty during cost-of-living crisis

New Households Below Average Income (HBAI) data for 2022-23, released today by the DWP, sheds fresh light on the cost of living crisis, with households across the income distribution experiencing a fall in real household incomes during this period, due to an inflation hit of 10 per cent.

The share of people living in absolute poverty rose from 17 to 18 per cent (up by 600,000 people to 12 million), with the child poverty rate jumping by 2 percentage points to 25 per cent (up by 300,000 to 3.6 million children). Food insecurity rose at the same time, from 7 to 10 per cent of households (a rise from 5 to 7 million people) – including a shocking 41 per cent of households on Universal Credit.

The Foundation notes, however, that today’s data also reinforces the vital role that Government support, such as Cost of Living Payments, played in helping alleviate some of the impact of the cost of living crisis for poorer households – contributing to an overall fall in income inequality between 2019-20 and 2022-23.

Given the importance of this kind of data in understanding living standards trends, the Foundation also welcomes the DWP’s experimental work in making use of administrative benefits data. This finds that around £40 billion a year of benefit spending is missing from the HBAI survey data, in part due to incorrect responses but also due to an underrepresentation of benefit recipients in the FRS sample. This is a significant problem and it is important that revision of the existing data progresses swiftly, to ensure that our understanding of family income levels and trends is correct.

Adam Corlett, Principal Economist at the Resolution Foundation, said:

“New HBAI data for 2022-23 highlights again just how difficult the cost-of-living crisis was for families, with the number of people in food insecure households jumping from 5 million to 7 million, and the number of children living in absolute poverty rising to 3.6 million during this period.

“It’s clear that this living standards hit would have been even worse without the big policy interventions such as Cost of Living Payments. But it’s also clear that strong, shared growth and further policy changes are going to be needed simply to return us to pre-2022 levels of income and deprivation.”