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The number of workless households, defined as households which include at least one person aged 16 to 64 and no-one in work, fell for the second consecutive year in 2012 to stand at 3.7 million. This represented around 17.9 per cent of all households within the UK, a fall from 18.7 per cent a year earlier.
Workless households fall into three categories – one where all members of the household are inactive, containing people who do not look for, or are unavailable to work, another where all members are unemployed, and a third where there is a mixture of both inactive and unemployed people. The majority of workless households are in the first group where everyone is inactive. Between 2011 and 2012 there was a fall in workless households of 153,000, driven by a reduction in the households where everyone is inactive.
There were 5.0 million people aged 16 to 64 living within workless households and a further 1.8 million children aged 0 to 15. Following the fall in workless households there were 332,000 fewer people aged 16 to 64 and 60,000 fewer children living in workless households.
As well as a fall in workless households there was also a fall of 36,000 in working households, defined as households which include at least one person aged 16 to 64 and all adult members are in work. In April to June 2012 there were 10.9 million households in which all adults members were in work, representing 53.0 per cent of all households.
Between 2011 and 2012 there was a rise of 246,000 in mixed households, which are those that contain people who are in work and those who are not in work, which may be through inactivity or unemployment. Of the increase in mixed households, the largest increase was for households that contain someone employed and someone inactive, for example a household in which one adult may be in work and the other staying at home to look after the family.
Since 1996, the earliest point a consistent series is available, the lowest estimate for both the number and percentage of workless households was in 2006, two years before the economic downturn hit the UK in 2008. The number of workless households was 233,000 lower than in 2012, at 3.4 million, and the percentage was 0.6 percentage points lower than in 2012, at 17.3 per cent.
Sickness, both long-term and temporary, was the main reason given for not working by the 5.0 million people aged 16 to 64 living in workless households. Around three in every ten workless people gave this reason, accounting for around 1.45 million adults. The second most common reason given for being a workless person was being unemployed, accounting for 1.03 million, or around 21.0 per cent. The next three most common reasons were looking after the family, retirement and study.
Of the 332,000 fall in people aged 16 to 64 who were workless between 2011 and 2012 around half of the fall were for people who were workless and give study (102,000) or retirement (83,000) as the reason.
Those who are workless and studying may look to enter the labour market in the future and those who are retired will mainly not look to work again. Around 641,000 of the workless households are households where all the people are retired and a further 118,000 are where all the people are studying and not working. If fully retired and student households are removed the number of households in the UK that are workless is 2.92 million.
The percentage of households that are workless varies depending on the financial arrangement under which the house is occupied. The two most common types of arrangement are a tenancy, in which rent is paid to a landlord, or owner occupancy. For most households, the participation in the labour market of its members will control most of its income, whether through wages for those in employment, or benefits for those who are not in work. This income will then impact on the choice of housing tenure. Also, the living arrangement will affect the behaviour of people within the household. For example, someone living in a house with a mortgage may be more likely to seek employment for fear of losing their home, compared with someone who does not have the same financial burden.
For those households renting from a social landlord, almost half (45.0 per cent) are workless, compared with around a fifth (19.9 per cent), of those privately renting. There is a link between the high percentage of workless households socially renting and the work status of the people living within these households. That is, some households have access to rent-free households because there are no working members. Also social housing is generally cheaper than privately rented, and more accessible to those who are workless.
For owner-occupied households, a much higher percentage of workless households own their home outright, 23.0 per cent, compared with those buying their home with a mortgage, 3.6 per cent. This reflects the need for household members to work in response to housing costs. Mortgage payments, for those owner-occupiers, are a large item of household expenses. Those households owned outright have none of these costs, so are more likely not to need to be in the labour market.
Over the past 15 years there has been a fall in the percentage of lone parent households with dependent children that are workless from 51.9 per cent in 1996 to 37.0 per cent in 2012. The first part of this fall happened between 1996 and 2006, it then remained flat for a few years and has fallen by 2.2 percentage points between 2011 and 2012. In recent years there have been policies aimed at getting more lone parents to actively engage in the labour market by reducing benefit entitlement.
Comparing lone parents and couple households, the latter have a much lower chance of being a workless household. In 2012 around 4.9 per cent of couple households with dependent children were workless, much lower than the 37.0 per cent for lone parent households, reflecting the ability for couple households to share childcare responsibilities.
Another important factor is the age of the youngest child in the family as this has an impact on the ability of parents to go out to work. As the child gets older, it becomes easier for those responsible for looking after them to go out to work. Entering primary school gives a window of opportunity to enter work and as a child matures and gets older, it may be possible for them to look after themselves for a short period of time. The impact is much greater for lone parent households as they are generally the sole carer for the child. In 2012 around 59.0 per cent of lone parent households with their youngest child aged 0 to 4 were workless. When the age of the youngest child was of primary school age and between 5 and 10 the percentage of lone parent workless households was 35.0 per cent.
In 2012 there were around 11.64 million children aged 0 to 15 within the UK. Of these, 8.75 million lived in couple households and a further 2.56 million lived with lone parents. Of these children living with lone parents, just under a half, or 1.16 million were in workless households. In total there were 1.75 million children living in workless households so around two in every three children in workless households are living with a lone parent. So the majority of children in the UK live with couples but the majority of those that live within workless households are living with a lone parent.
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