What is Poverty? The Definitions of Poverty

What is poverty?

When we think about poverty, we usually think about economics. In reality, poverty has a face. It’s a girl forced to marry because her family can’t support her. A mum who can’t buy medicine to save her baby’s life. A boy sent to work on the rubbish heap, rather than the classroom.

Poverty facts

• According to UNICEF, 412 million children are living in extreme poverty worldwide.

• About 13,300 children die each day before celebrating their fifth birthday, mostly from preventable causes.

• Over the past 50 years, global immunisation efforts have saved an estimated 154 million lives, equivalent to around six lives every minute over that period, preventing millions of child deaths each year with the WHO saying it should be possible to save millions more. UNICEF state that immunisations are one of the safest ways to protect children.

• On average, children born into the poorest 20 percent of households are almost twice as likely to die before age 5 as those born into the richest 20 percent.

• Each year, about 100 million are forced into extreme poverty as a result of health-related expenses.

• According to the World Bank, around 831 million people still live in extreme poverty and hundreds of millions suffer from chronic hunger.

• Children are more than twice as likely to live in extreme poverty than adults.

• At current trends, 90% of the world’s children living in extreme poverty will be in sub-Saharan Africa in 2030.

What does poverty mean for children?

Children are left most vulnerable to the effects of poverty: from the moment their life begins, a child’s future is shaped by their environment. Almost half of the estimated 831 million people who live in extreme poverty are children.

Poverty can rob children of their basic rights. There’s significant evidence to show that poverty can have devastating short and long-term effects on a child’s ability to learn, build relationships and make a positive transition to adult life.

According to UNICEF, “The consequences of inadequate nutrition, lack of early stimulation and learning, and exposure to stress last a lifetime. ” If they have families of their own, there is a high probability that poverty will be passed down to future generations.

Amina: a glimpse of what hope can grow

Amina with photo of her younger self

Amina grew up in Rwanda feeling small and unseen. Often ill and malnourished, she was bullied, and her mum faced criticism in the community.

Everything began to change when Amina joined her local Compassion church project. With food, clothes and encouragement, she grew healthier, and her confidence grew too. Her sponsor’s prayers helped her stay in school when others dropped out.

Given a book called My Plan for Tomorrow, Amina learned to dream with God-given purpose. Today she leads SAYE, a social enterprise supporting teenage mothers and tackling menstruation stigma, reaching more than 10,000 girls and women so far.

Read Amina's story, in her own words.

How do age and gender impact poverty?

Age and gender can intensify poverty. Where women and children have fewer rights or less access to education, healthcare and safe work, poverty becomes harder to escape and girls are often at greatest risk.

Globally, 1 in 5 young women were married before 18. Child marriage can bring education to a halt, and is linked to higher risks of early pregnancy, domestic violence, and isolation that takes a heavy toll on girls’ wellbeing.

Has progress been made in the fight against poverty?

There have been great successes in the fight against poverty in the past 35 years:

• Extreme poverty has declined by more than half, from 1.9 billion people in 1990 to 831 million in 2025.

• Many more girls are now in school compared to 15 years ago. Across low- and middle-income countries overall, progress has been made towards closing the gap between girls’ and boys’ enrolment in education.

• The global poverty rate is now lower than it has ever been in recorded history. However, since Covid-19 the rate of progress has slowed and even worsened in certain areas.

There’s still a long way to go

Globally, 412 million children are still living in extreme poverty (on less than $3 a day). This is an updated benchmark that was set from June 2025, which replaced the previous $2.15 a day figure when 333 million children where said to live in extreme poverty in 2022.

Despite the tremendous progress, poverty rates remain stubbornly high in low-income countries and is made worse for those affected by conflict and political upheaval.

FAQs about poverty

What’s the official definition of poverty?

The World Bank‘s poverty definition says, “A person is considered poor if his or her income level falls below some minimum level necessary to meet basic needs.” It sets this minimum level, or international poverty line, as living on less than $3 a day (2021 PPP*).

What’s the difference between absolute poverty and relative poverty?

• Relative poverty considers your location and what it means to be poor in a particular society. It measures if your income falls below the minimum amount needed for you to maintain the average standard of living in the society you live in.

• On the other hand, the World Bank tracks extreme poverty using an international poverty line. Rather than measuring poverty against the rest of the population, poverty is measured against a fixed standard of living. In June 2025, the World Bank set a new global poverty line at $3 a day (sometimes expressed as approximately £2.26 but this is not a direct currency conversion).

While both definitions are valuable, they view poverty through a single lens of income and consumption. In reality, poverty is far more complex and involves other social, cultural and political aspects.

Beyond material hardship, poverty shapes how children and families see themselves and their future. Constant struggle can strip away hope and confidence, making it feel impossible to believe that life can change.

What is a poverty line and how is it calculated?

If a person’s income is ‘below the poverty line’ in their country, it means they don’t have enough money to meet their minimum needs for nutrition, clothing and shelter. Poverty lines are different in each country, higher in richer countries and lower in poorer countries.

What is the international poverty line?

Each country has a different poverty line. To make easier comparisons, the World Bank updated the global poverty line of $3 per day (2021 PPP*) in 2025.

What is the poverty line in the UK?

The Joseph Rowntree Foundation defines the poverty line in the UK as households earning less than 60% of the median income. They say that current findings suggest that poverty is deepening in the UK, with an estimated 3 in 10 children living in poverty.

What are the sustainable development goals?

The Sustainable Development Goals were adopted by world leaders in September 2015 at an historic UN summit. The SDGs build on the success of the Millennium Development Goals, and aim to go further in ending poverty while protecting the planet for the future.

See how Compassion's work aligns with these global efforts to eradicate poverty.

What are the causes of poverty?

Some of the most common causes of poverty include:

• Conflict and insecurity, which can force families from their homes and disrupt access to education, healthcare and livelihoods

• Limited access to education, particularly for girls, which affects future employment and income opportunities

• Poor health and lack of healthcare, where illness or disability can prevent adults from working or push families into debt

• Inequality and discrimination, including gender inequality, which restricts access to resources, rights, and increasing material deprivation and lack of opportunity.

• Climate change and environmental shocks, such as droughts or floods, which disproportionately affect communities already living with few resources

• Weak infrastructure and economic systems, making it harder for communities to build stable, long-term livelihoods

These factors often reinforce one another and so the risk of poverty persists across generations. That’s why reducing poverty requires approaches that support the whole child and their wider community, rather than addressing individual needs in isolation.

Compassion’s response to global poverty

Poverty can feel overwhelming. When we hear that 412 million children still live in extreme poverty we may wonder what difference we can really make.

That’s why we invite you to join us in helping to end child poverty, by choosing to sponsor a child.

ending global poverty

Our holistic child development programme is a highly strategic way of ending poverty, through long-term sustainable change, led by local churches who understand the needs of their communities best.

Your support helps provide for the real-life needs of a child living in poverty by tackling the root causes that hold them back.

Compassion connects one child born into the vulnerability of poverty with one sponsor, like you. You can give a child access to the opportunities they deserve by sending them to school, providing them with nutritious meals and protecting their health with regular medical check-ups.

Each child is nurtured through the relational support of their local church. The support ripples out so that families are strengthened and whole communities transformed.

Can poverty be stopped?

definition of poverty

The great news is that extreme poverty has fallen dramatically over the past generation. In 1990, around 1.9 billion people lived in extreme poverty. By 2025, that figure had fallen to around 831 million. In other words, over a billion people have escaped the very worst forms of poverty in just over three decades.

Progress has slowed in recent years, and in some places it has even gone backwards since Covid-19. But these figures still show something important: poverty isn’t inevitable. Change is possible.

If you’d like to respond, there are many ways to follow Jesus’ lead and move with compassion. That could mean sponsoring a child, supporting children across whole communities, or helping meet urgent needs through critical interventions when families are most vulnerable.

We’d love you to join us and be a part of this story of change as together we work to release children from poverty in Jesus’ name.

Sources: UNICEF, WHO, World Bank

*See World Bank fact page about Global Poverty Lines and use of 2021 PPP (Purchasing Power Parity)