|Date:||02 November 2017|
|Authors:||Andrew Hood and Tom Waters|
A new report by IFS researchers, produced with funding from the Joseph Rowntree Foundation, combines official economic forecasts with planned tax and benefit reforms to project incomes and poverty rates among UK households between 2015-16 (the latest data available) and 2021-22.
If the latest forecasts from the Office for Budget Responsibility (OBR) were to prove correct, and the government were to stick to current plans for changes to benefits (including the roll-out of universal credit), we estimate that between 2015-16 and 2021-22:
The report also finds that:
Tom Waters, an author of the report and a Research Economist at IFS said:
“If the government sticks to planned benefit cuts, it should not be surprised if, according to the official measure, absolute child poverty rises. Every region and nation is projected to see an increase in child poverty, with the largest increases in the North East, East Midlands, Wales, and Northern Ireland, and the smallest in London, the South East, and South West. The larger projected rises occur in areas where families with children are more reliant on benefits than earnings for their income, and where more families are likely to be adversely affected by the new two-child limit on means-tested benefits.”
Andrew Hood, an author of the report and a Senior Research Economist at IFS said:
“Growth in average household incomes over the next few years is likely to be sluggish at best. If workers’ earnings grow as the OBR expected back at the March Budget, median income is projected to rise by just 4% over the next four years – about half as fast as was normal before the financial crisis. But given that the OBR have already indicated they now think that forecast was too optimistic, the true picture could be even worse.”
Notes to Editors:
1. The IFS report Living standards, poverty and inequality in the UK: 2015–16 to 2021–22 by Andrew Hood and Tom Waters, was published on the IFS website at 00.01 Thursday 2 November 2017. An online appendix, including all data for charts and tables, together with number of people in poverty and further analysis, will also be available.
2. Absolute poverty lines (£ per week) in 2017-18 prices for example families (assuming any children are under 14), measuring household income net of direct taxes, including benefits and after housing costs have been deducted:
3. This report was produced with funding from the Joseph Rowntree Foundation (JRF). The Joseph Rowntree Foundation is an independent organisation working to inspire social change through research, policy and practice. For more information visit www.jrf.org.uk.