Britain’s poorest 30% of families were up to £150 worse off in 2017/18 compared to the 2016/17 financial year, according to a report by an independent think tank.
The Resolution Foundation’s analysis of recent trends in household living standards suggests that while all households saw slower income growth last year, those in the poorest 30% of households suffered the most significant drop in their disposable incomes, taking home between £50 and £150 less last year.
It estimates that real household incomes fell by 0.5% to 1.5% among households in the bottom third of households once low wage growth and benefit cuts are taken into account, while incomes in middle-income families rose by 0.9% and incomes in the top half of families are estimated to have grown by around 0.4%. The Resolution Foundation says that such a hit to living standards is “clearly worrying” and will have impacted on child poverty.
The report also highlights a general trend towards increased child poverty, driven by a rise in children living in poor working families, which is up from 30% to 39% since 2003.
Adam Corlett, senior economic analyst at the Resolution Foundation, says: “Our analysis shows how important cash benefits such as 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 £14 billion worth of benefit cuts. The risk is that, unless the lessons of the past are learnt, the future could spell squeezed incomes and further increases in child poverty.”
However, the think tank’s findings have been questioned in some quarters.
Talk Radio presenter James Max tweets: “The BBC and others report the Resolution Foundation’s report on Living Standards as “news” and fact. It’s opinion and conjecture. Based, in my view, off deeply flawed and extrapolated analysis. Should we discuss this? Yes. Are the conclusions correct? No.”
Meanwhile, former Prime Minister Tony Blair tweeted: “We went from a situation where in the mid-90s, six in 10 families on low incomes would remain stuck, to four in 10… None of this would have happened unless there was a set of policies geared to making it happen.”Britain’s poorest 30% of families were up to £150 worse off in 2017/18 compared to the 2016/17 financial year, according to a report by an independent think tank.