New report by the Institute of Fiscal Studies


A new report by the Institute of Fiscal Studies (IFS) reveals that Government changes to the benefit system will bring to an end a period of strong income growth for the poorest households and push thousands of children back into poverty.

Planned cuts to the welfare bill over the next five years will wipe out gains from higher wages and low inflation that have improved incomes across the board in recent years. Families with more than two children will be the worst affected as support is scaled back for larger families. The report forecasts that the proportion of children in relative poverty will rise by eight percentage points and those in absolute poverty by three percentage points by 2020-21, almost entirely as a result of increasing hardship among families with three or more children.

The report goes on to say that incomes near the top of the scale are projected to increase by 2.3% a year, while those near the bottom are expected to remain constant in real terms. Among those on low incomes, pensioners will see a steady improvement in their incomes, running against the relatively worsening trend for children and working people.

Turn2us comments

Simon Hopkins, Chief Executive of Turn2us, commented: “This report highlights the fact that affording a basic standard of living will continue to be a genuine struggle for huge numbers of families. The importance of getting the help available to those who really need it remains critical. Benefits are central to this, of course, but that help is also available from sources such as charitable grants, especially where tough times result from sudden life events.

“Therefore, I would urge anyone who is struggling with money to use our Benefits Calculator and make sure you are receiving everything for which you qualify, and also our Grants Search, which has over 3,000 charitable funds that could help.”

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Source: Institute of Fiscal Studies (IFS) report