Author: Sara Davies and Andrea Finney
Publication date: Spring 2020
Published by: Social Research Association
Source: Social Research Practice, Volume 9, Spring 2020

The poverty premium, when households pay more for essential goods and services because they are poor, remains a problem in the UK today. Previous attempts to measure it, however, have been crude. This research aimed to take the measurement of the poverty premium beyond an illustrative figure to something which better reflects the lived experiences of poorer households. To achieve this, we developed a conceptual framework to understand how the poverty premium arises, taking a process-driven rather than a traditional sector-based approach to identify components of the poverty premium. We then calculated a typical cost for each component and surveyed lower-income households to measure exposure to them. The average poverty premium incurred was £490. Finally, cluster analysis explored the underlying heterogeneity of the poverty premium. Importantly, our approach reveals the breadth and depth of people’s experience of the poverty premium and the pathways which contribute to it. It has highlighted the implications of behaviour and constraint for effective practice and policy intervention, and will make it possible to monitor the poverty premium more accurately and meaningfully over time.