“This is our last State of the Nation report prior to the 2015 UK General Election. As such it presents a verdict on the past and provides a window into the future. Our central conclusion is that the next Government will have to adopt radical new approaches if poverty is to be beaten, mobility improved and if Britain is to avoid becoming a permanently divided society. We define that as the 2020 challenge. We base this conclusion on our analysis of what has been achieved in tackling these issues over the last year and during the current Parliament. There has been progress on a number of fronts despite the difficult circumstances for doing so. Since our 2013 report, the British economy has bounced back sharply. Recovery is now strong, employment rates are close to record levels and unemployment has fallen rapidly. There have been big falls in the proportion of young adults who are not in full-time education or employment. The employment rate among lone parents with dependent children is at its highest ever level and the number of children in workless households has continued to fall to an all-time low. In addition, cost of living pressures have eased and the UK Government has taken some valuable steps to raise living standards, for example by freezing council tax and fuel duty. The really good news is that child poverty against the headline targets in the 2010 Child Poverty Act is at historically low levels: in 2012-13 relative child poverty was at its lowest level for almost 30 years… That such progress has taken place at a time of economic dislocation and fiscal consolidation is particularly pleasing. Equally it would be wrong to overstate what has been achieved. There are clear signs that the economic recovery is not being matched by a social recovery. There are 600,000 more children in working households who are living in absolute poverty after housing costs than there were in 2009-10. Too many of the jobs that are being created in the economic recovery are low-income and high-insecurity. They are a dead-end not a road to social progress. There are five million low-paid workers in the UK and, despite the success of the National Minimum Wage in eradicating extreme low pay, the proportion has barely changed in two decades. Worse still, only one in five workers who were low-paid in 2002 had managed to escape low pay by 2012. Too many poor workless parents have simply gone on to become poor working parents. Average earnings have fallen significantly since the recession and it will be at least 2018 before they are back to pre-recession levels. Young people have been the principal losers. Their wages are falling and, relative to a decade ago, their job prospects are diminishing. Youth unemployment is still higher than before the recession and by the time of the next election around half a million young people will still be without work.”