Commenting on the actions and choices of those in poverty seems to have become a national sport. It’s rare to ever have a discussion about economic hardship in Britain without a bystander or internet commenter leaning forward and opining “But they’ve all got flatscreen TVs and smoke cigarettes.” The economic choices of the very poorest are seen as ripe for public dissection.

But the psychological consequences of poverty are discussed far less. Oxford University and the Joseph Rowntree Foundation have released a study that goes some way to silencing those who would argue poverty is simply a moral failing. The newly released Household Below Average Income figures for 2013/14 show no progress whatsoever on poverty rates, and a slim increase in child poverty and working families earning less than they need: so poverty is here to stay.

When facing poverty, the researchers found, individuals enter a “scarcity mindset”. When focused on short-term survival, your decision-making ability is scrambled and your attention span narrowed. The attendant worry means long–term planning and the completion of peripheral, routine tasks is downgraded as the immediate future becomes the only focus. Debt counsellors have found this for years, with people in debt struggling to understand how they ended up like that, only knowing that many short-term financial crises snowballed.

When you’re constantly poor and struggling to make ends meet, the scarcity effect permeates all decisions. Any discussion of food poverty invariably segues into a denunciation of anyone who doesn’t plan meals days in advance, buying ingredients in bulk and cooking from scratch. Lady Jenkin’s “let them eat porridge” outburst overshadowed the Church of England’s Feeding Britain report launch. Psychologically, if you’re faced with some immediate bills and a shortfall in cash, that doesn’t happen. Cheap and filling meals are rarely nutritionally balanced, but being aware of how little money is available means it makes more sense short term to spend a little for one day’s food, than a lot for several days when you’ve no idea when you’ll next receive any income.

Perhaps more damaging in the long term are the findings on how people feel about themselves when they’re in poverty. They are less confident in their ability to succeed, leading to decreased professional and educational attainment, depression and anxiety. The study also reported a “negative self-stereotyping” effect, whereby people in long-term poverty absorbed the prevalent media stereotypes of people on benefits or facing unemployment as being “low in warmth and low in competence”. Believing themselves to be fundamentally flawed, any achievement is tempered by a lack of confidence and subconscious self-loathing.

This is also true of children in poverty, who underestimate their own intelligence and capability, which then becomes a self-fulfilling prophecy. A recent Institute of Education study found that teachers also attribute negative characteristics to children in poverty and perceive them to be less able. If children internalise the stereotypes projected on to them while so young, it does nothing to boost their life chances. Politicians arguing that working class children need to be “taught” about aspiration would do well to consider the fact that when there’s little available to aspire to, any effort seems pointless.

One solution to temper the psychological effects on poverty, the study finds, is mixed communities. When people come into contact with others of different economic positions, negative stereotypes are dissipated. Properly mixed-intake comprehensive schools, and diverse communities could have a positive effect on attitudes, helping rich and poor. But while the government presses on with sanctions and the punitive bedroom tax expect more division, rather than understanding.