The cycle of poverty, also called the poverty trap, is a situation when individuals or whole families encounter numerous obstacles which prevent them from freeing themselves from the circumstances of little to no material resources to support themselves. People may lack education, financial capital or connections which could help them to elevate themselves above the poverty line. It’s not uncommon that this kind of helplessness is passed on from generation to generation. Parents who become unemployed as a result of a recession in a national scale or a disease at an individual level may find it difficult to provide for their children. The kids, in turn, lacking their parents' support perpetuate the same behaviour patterns not knowing where to seek help to increase their chances for social mobility.

Reasons for poverty are as varied as people's life stories are. Although poverty is more widespread in certain parts of the world, we have to remember that people can fall into it everywhere. Statistics show that in the USA, two out of five households don’t have any savings for a rainy day. It means that any emergency or crisis can easily turn such a family’s life topsy turvy. It can be unexpected unemployment or a medical emergency, which results in running up a huge debt. In rural areas, situations, such as failed crops, due to extreme weather conditions or war, can also push people living off their land into poverty.

Acquiring new skills seems to be one of the best options for people to upgrade their chances of getting better‑paid jobs and improving their material status and living conditions. However, for many people access to adequate education is still very restricted. It certainly varies across different countries of the world, but even in highly developed ones, in which we take education for granted, not all kids have equal chances to learn. Research clearly shows that children from impoverished districts and low to middle income households are at a disadvantage. They are much less likely to finish their schools let alone to proceed to secondary or tertiary education. Adult people face slightly different problems. If made redundant after many years of working in only one low‑skilled profession, many people feel lost and unable to requalify and find new occupations. This starts the poverty cycle that is very difficult to break.

According to the research conducted by the World Bank, millions of people around the world are stopped from breaking out from the poverty trap by poor water supply and inadequate access to sanitation. Drinking contaminated water may result in the development of debilitating conditions, for example diarrhoea. Not only can it keep children from attending schools and missing out on their education or adults from going to work and providing for their families, but it can also turn out to be fatal. One of the aspects of this broad problem is menstrual poverty. The lack of access to adequate menstruation products and sanitation makes many people skip school or work. They are unable to participate in daily life and it lowers their chances of improving their overall situation. Countries, such as Scotland, decided to tackle this problem by distributing free hygiene products in public places.

Inadequate housing conditions can be both the result and consequence of poverty. Children living in cramped households with no private space to learn more often drop out of school early which lowers their chances for better employment. What’s more, as affordable housing is scarce, low‑income families are forced to seek accommodation in the areas which, first of all, are further from places offering better employment or education opportunities and, secondly, are more afflicted by crime. According to the Harvard University’s Joint Centre for Housing Studies, nearly 38 million American households are forced to devote more than 30% of their incomes to costs connected with housing. Hence they often have to make hard decisions about food, transportation and health.