Poorest third of Britons saw incomes fall by up to £150 last year, study reveals
2 min read
Britain’s poorest families saw their incomes go backwards last year, as the gap between the lowest earners and those on middle and higher-pay grades widened.
The Resolution Foundation found households in the lowest 30% bracket saw their incomes fall by between £50 and £150, while others saw a modest rise in their living standards.
The report found that the 0.3% drop in incomes for the poorest was enhanced in its impact by a weak recovery in wages over the last decade.
A middle income family saw a modest rise of 0.9% in its income, in contrast to 1.6% the previous year, while those at the top saw slower growth at 0.4%.
Meanwhile, child poverty is said in the report to have jumped last year by around 3% as a result of benefit cuts.
The thinktank says the 3% real-terms fall in the value of tax credits and child benefit was a major reason behind the rise.
Elsewhere, the study found that miscalculations in how much the Government spends on benefits, meant the proportion of children in poverty has actually grown by 21% between 2010 and 2016, rather than 11%.
Adam Corlett, Senior Economic Analyst at the Resolution Foundation, said: “Reducing child poverty has been a goal of politicians from all parties in recent decades.
“But our analysis shows that child poverty is likely to have risen last year, and that rises since 2010 have been underestimated in official government data.
“Our analysis shows how important cash benefits like tax credits have been for supporting just about managing families and tackling child poverty since the millennium.
“It’s vital that government and other policy makers understand the positive impact that cash transfers have on low-income families, not least as they are in the middle of a huge multi-year programme of over £14bn worth of benefit cuts.
“The risk is that, unless the lessons of the past are learned, the future could spell squeezed incomes and further increases in child poverty.”
Shadow Work and Pensions Secretary, Margaret Greenwood said: “The sharp rise in child poverty on this Government’s watch is shocking.
“Government denials can’t disguise the impact that deep social security cuts are having on low income families who are struggling to cope with basic household bills.
“The harsh reality behind the figures is one of families forced into debt and even turning to food banks to survive. All too many of these households have someone in work whose wages don’t cover rapidly rising rents.”
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