The Joseph Rowntree Foundation reports that the number of individuals in the UK facing severe poverty has hit a new high. The foundation highlights that poverty has become more entrenched, with those affected now living 29% below the poverty line, an increase from 23% in the mid-1990s. Moreover, the report reveals that 6.8 million people are experiencing severe poverty, representing almost half of all individuals living in poverty, marking a record level.
While the Labour Party’s decision to remove the two-child benefit cap is anticipated to reduce child poverty by around 400,000 compared to the previous year, the Joseph Rowntree Foundation cautions that without additional interventions, relative poverty rates are expected to remain elevated post-April.
Additionally, the foundation’s analysis indicates a resurgence in child poverty, reaching 4.5 million children and escalating for the third consecutive year. The report also raises concerns about the rapid increase in hunger, with 1.1 million more impoverished individuals struggling to afford adequate food compared to two years ago, totaling 3.5 million affected.
In other news, a significant overhaul of the self-assessment tax system set to take effect in April may result in thousands of workers facing additional tax obligations. The introduction of Making Tax Digital (MTD) will mandate sole traders and landlords with annual incomes exceeding £50,000 to adopt the new tax reporting system, incurring an average cost of £320 for initial software transition and £110 annually thereafter. The gradual implementation of MTD for lower income thresholds will see the threshold decrease to £30,000 by April 2027 and further to £20,000 by April 2028.
Moreover, wholesale gas prices in Europe, including the UK, have surged due to freezing weather conditions in the United States. The disruption caused by winter storms in the US has led to a reduction in liquefied natural gas exports, impacting gas prices in Europe. The UK witnessed a spike in day-ahead gas prices to 104.13p per therm, marking the highest level since April last year. Concerns loom over potential effects on household energy bills as wholesale prices continue to rise.
On a positive note, disposable income growth in select UK towns and cities has outpaced the national average, according to a report by the Centre for Cities. These top-performing areas recorded a 5.2% increase in living standards since 2013, with cities like Brighton, Worthing, and London leading the pack.
In a bid to aid over five million leaseholders, ground rents in England and Wales will be capped at £250 per year, eventually dropping to a nominal fee after 40 years under proposed legislation. This move aims to alleviate financial strains on leaseholders facing escalating charges and provide greater flexibility in property ownership.
State-owned savings bank NS&I is reducing interest rates on its Direct Saver and Income Bonds products, attributing the change to shifts in the savings market landscape. The adjustments, effective from February, will impact hundreds of thousands of customers holding these accounts.
Finally, luxury cinema chain Everyman has announced a halt in new venue openings for 2026 as part of its debt reduction strategy, following a recent profit warning and leadership change. Meanwhile, iconic footwear brand Dr Martens reported a decline in quarterly sales due to a strategic shift away from discounts, coupled with cost pressures from US tariffs, causing a dip in its share price.
Unfortunately, over 1,000 jobs and numerous stores are at risk as Claire’s faces administration once again, just months after being acquired by Modella Capital. The retail sector continues to experience challenges, with shop price inflation rising in January due to various factors including energy costs and National Insurance hikes.