Millions of poorest households worse off by up to £150 last year
The incomes for the poorest third of Britain’s households fell by between £50 to £150 as inflation and cuts to benefits eroded wage growth
BRITAIN’S poorest families saw their incomes slump last year, as inflation and cuts to benefits outpaced wage growth.
According to the Resolution Foundation, the poorest third of British households were left worse off by as much as £150 in 2017 to 2018.
Just under a third of the population or 19.2 million people and a quarter of families, 8.1 million, are on low to middle incomes.
Overall, the think tank annual Living Standards audit found income growth slowed for all households last year.
Typical middle-income households experienced growth of 0.9 per cent last year - this was the weakest growth since 2012. Those at the top saw slower growth at 0.4 per cent.
More than 40 per cent of low to middle income families now feel they would be unable to save as little as £10 a month. While 38 per cent said they would be unable to afford a holiday for one week with their children.
Another 13 per cent said they do not have enough rooms for their children.
A fall in disposable income for the poorest 30 per cent of households also means child poverty rose by 3 per cent in 2017, according to the report.
This was driven by benefit cuts that particularly hit low-income families, including the 3 per cent real-terms fall in the value of tax credits and child benefit.
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The Resolution Foundation said in the report: "It is likely that 2017-18 was a poor year for lower-income households, yet beyond this our figures suggest that there has been in a general stagnation in living standards for the majority of households over the last two years."
Adam Corlett, senior economic analyst at the Resolution Foundation, said:“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.
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"The risk is that, unless the lessons of the past are learned, the future could spell squeezed incomes and further increases in child poverty.”
According to a separate study, rising inflation combined with a freeze in working benefits means couples with two children need to spend more than £40,000 a year to reach a decent standard of living.
Earlier this month, the Joseph Rowntree Foundation (JRF) – a charity which tackles poverty - said that changes to the benefits system made life harder for lower income families with single breadwinner and lone parent families feeling the pinch the most.
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