Families to see their income drop £2,000 by 2013
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A typical family will see their annual income fall by around £2,000 by 2013, a report out today from the Institute for Fiscal Studies says.
The report estimates the income of middle-class families is expected to fall by around 7% in real terms, which would be the largest fall for 35 years.
The think-tank says the impact of changes to personal tax and benefit policy announced by the coalition government is to increase relative child poverty by 200,000 in both 2015-16 and 2020-21, and to increase relative poverty for working-age adults by 200,000 in 2015-16 and 400,000 in 2020-21.
These compare to the targets of 5% and 10%, set out in the Child Poverty Act 2010.
James Browne, one of the authors of the report, says: “The previous government significantly increased spending on benefits and tax credits for families with children, and child poverty fell by nearly a quarter between 1998 and 2009, but this was still not enough for the government to hit its child poverty targets.
“Even if there were an immense increase in the resources made available, it is hard to see how child poverty could fall by enough to hit this supposedly legally binding target in just nine years. If the government disagrees, then it should set out concrete suggestions about how it will achieve the targets, ideally backed up by quantitative modelling similar to that in our report.”.
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