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New IDS research shows poorest households trapped in digital poverty cycle

Published on 4 August 2022

As the UK’s cost of living crisis bites, new research shows that 1 in 10 of England’s poorest households (9 percent) reduce spending on food or clothes to afford phone or home internet, whilst almost 1 in 5 (17 percent) run out of data before the end of each month.

A hand holding a phone

With many essential services now digital by default, those unable to afford to connect to the internet are losing out from not accessing online benefit payments, job seeking sites, food or travel discounts from online apps, or price comparison site savings, resulting in even deeper poverty.

Digital Poverty in the UK, published today, draws from data from a survey with households in England with an annual income of under £25,000 about their online connectivity. It found that 1 in 5 households have no access at all to the internet. This figure rises to nearly third of disabled people in the same income bracket, and nearly half of those over 65.

Of those that do have internet access, one in five say that the connection is not stable enough to carry out the essential services they need and almost one in three (31 percent) of interviewees with a smartphone or tablet ration mobile internet use to avoid running out of data.

An infographic showing the effects of digital poverty on the poorest households in the UK

Dr Becky Faith, Research Fellow at the Institute of Development Studies, said:

“Our research shows clearly that the cost-of-living crisis risks further entrenching the digital divide across the UK. In an economy where crucial services like universal credit are now ‘digital by default’, requiring both internet access and digital skills to apply and claim, a lack of online access increases both societal exclusion and poverty.

“Government action is urgently needed both to ensure social tariffs are fit for purpose, and to provide free public access to the internet to those most in need in order to prevent low-income households remaining trapped in vicious cycle of poverty”

Broadband companies use a pricing model which pegs tariff price increases to inflation and adds a further flat rate on top, meaning that welfare payments and wages are not keeping up with steep broadband price increases. Affordability research published by Ofcom shows that on average, individuals at the bottom 10 per cent of the income distribution spend around 19 per cent of their income (after deduction of essential costs such as housing, utilities, and food) on a fixed broadband tariff. This is well over ten times higher than the average household, which spends around 1.3 per cent. The report released today shows that this is wholly unaffordable for many low-income households, meaning the cost-of-living crisis is further compounding digital exclusion in the UK.

The data, drawn from telephone interviews with low-income households, as well as jobseekers and organisations providing support to jobseekers, also highlights flaws in the lower cost ‘social tariffs’ designed to be affordable for lower income households. Social tariffs are shown to be widely unheard of, and broadly inadequate for internet use in a household with more than one person. They require a fixed broadband connection, excluding those who cannot afford it or live in accommodation where it isn’t available.

The report recommends policy action to tackle the digital policy trap and address the broader issue of digital exclusion. Measures recommended include free public Wi-Fi provision and the development of a minimum digital living standard to allow households an adequate quality of life and participation in society. Social tariffs could be improved to meet these living standards in terms of speed and cost, whilst broadband could be subsidised in a similar way to other public services – providing free services for elderly or disabled people – funded by increased taxes on the largest telecoms companies.

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