New research from national employment charity Tomorrow’s People reveals that the number of families where nobody has ever worked could be approaching half a million.

The research was undertaken because, despite no official statistics relating to inter-generational worklessness, the number of workless households has increased over the last 30 years, in contrast to increasing employment figures.

Existing solutions, saysTomorrow’s People, are clearly not working for these families.

The charity worked with Oxford Economics to look at the cost of inaction versus the value of investing in helping families back into the workforce.

Debbie Scott, CEO of Tomorrow’s People, said: “Programmes designed to get people into work tend to focus on the individual, in isolation of the family, but the research shows that this simply isn’t effective for workless households.

"We believe that it is time for some fresh thinking. The answer lies in addressing the problem from a family perspective – not an individual one.”

The non-employment rate for individuals is 3% lower than in 1974 but the family non-employment rate is 7% higher, additionally, the proportion of working age adults in workless households has tripled.

Between 1975 and 2001 there has been a 250% increase in share of households where no adult works. In the UK 60% of children in workless households live in poverty, compared to 10% in working households.

Furthermore, the impact of the recession means it will be harder for workless households to find work as the pool of surplus and more skilled labour increases. During ‘normal’ times 8% who lose their job never get another one, during a recession 25% of those who lose jobs never return to work.

Tomorrow’s People believe that targeting families gets to the root of the problem, given that individual decisions about employment have an effect on the rest of the household.

This is true both from an economic point of view and from a socio-cultural one (the stigma of worklessness may be reduced).

However, these families are some of the hardest to reach, not only because they are ‘hidden’ statistically, but because many do not recognise themselves as part of an intergenerational workless family. A further challenge is that initiatives to break this cycle require long-term commitment and are labour-intensive.

75% of workless families are dependent for at least half their income from benefits, for those with children this increases to 95%.

Andrew Tessler from Oxford Economics, added: “Workless families place a significant financial burden on government in terms of benefits paid and support provided. In addition there is a negative impact on the quality of life of those experiencing worklessness, affecting their confidence, work skills and motivation.”

The cost to the state of unemployed families is high, as unemployed families rely heavily on social security payments.

Additionally, the benefit system may act as an incentive for workless households to avoid entering employment. This is particularly true for those who are not in work and receiving relatively high levels of benefit payments and who would probably receive only a low income from employment.

Below certain income thresholds, the marginal deduction rates for benefits can be as high as 90% (i.e., for every additional £1 earned, the benefit reduction amounts to £0.90).

Oxford Economics identifies the potential benefits of adopting the Tomorrow’s People family-centred approach as including: Increased output through family members entering the labour market; Government savings from reduced benefit payments; increased benefits to the community as people take a more active role in community life by supporting others in the family into work

There may also be other social and cultural benefits such as reduced health costs or higher school achievement. Members of a household where three generations are out of work and have little hope of finding work without some form of intervention, are far more likely to suffer from problems of ill-health, debt, poor education and shorter life expectancy.

These associated symptoms of worklessness, all lead to costs that must be borne by wider society.

Debbie Scott added: “There are many factors that have contributed to the rise in the number of workless families.

"Some factors are well documented, easier to identify and more straightforward to deal with by government and other organisations – such as low basic skills, access to transport, childcare, etc. But others, such as the cultural barriers associated with worklessness, pose a much greater problem.”

These problems can include: poor health and disability; lack of qualifications; caring responsibilities; transport and mobility. In addition, families may not feel that they need help, they may not be confident enough to seek help, or they may already feel let down by the system.

The research says there is also a benefit myth, with people finding it hard to understand that a National Minimum Wage job that pays a little over £10,000 before tax could possibly replace an income from benefits income of double that.

This is because it is not always made clear that allowances and tax credits will top up income.

The research has been funded by the Pears Foundation.

Trevor Pears, chair of the Foundation, said: “We hope that this timely report’s findings will lead to a debate within the sector about the challenges of getting workless families into work. We also hope that this research will heighten awareness of the issues and difficulties facing workless families in twenty-first century Britain.”