Reductions in relative poverty continued in 2010/11, according to the latest official figures. But unlike in previous years, this did not reflect rising absolute living standards among poorer households – instead, it reflected big falls in median incomes.
The annual report examines trends in the number of UK households on below-average incomes.
The government’s austerity strategy is disproportionately hurting those on the lowest incomes, according to an Oxfam report. It describes a ‘perfect storm’ of factors – increasing unemployment, a lack of decent jobs, rising living costs, falling incomes and deep cuts to welfare and public services – hitting the most vulnerable people, both in and out of work.
The report combines an analysis of the recession’s effects with a series of policy recommendations.
A think-tank report has said that for more than a decade before the global financial crisis households on low-to-middle incomes relied on borrowing to fund much of their spending.
The report says that, over the 10-year period of 1997–2007, spending grew faster than incomes across all households, but for the poorest groups this phenomenon was much more pronounced.
Almost one in five people (18 per cent) are finding it increasingly hard to afford essentials such as food and energy bills, according to new polling data from the Resolution Foundation think tank. The number of those expecting their financial situation to get worse in the next year has risen to more than one in four.
The poll is the latest quarterly tracker of household finances, carried out by Ipsos MORI. The poll found that:
Current government policy on social justice hinges on the claim that there are 120,000 ‘troubled’ families in Britain but this is deeply flawed, argues Professor Ruth Levitas in There may be ‘Trouble’ Ahead: What We Know About Those 120,000 ‘Troubled’ Families (PSE: UK, policy working paper 3). The government programme defines ‘troubled families’ as ‘characterised by there being no adult in the family working, children not being in school, and family members being involved in crime and anti-social behaviour’. But the 120,000 figure derives from households experiencing multiple deprivations, with no evidence that they are involved in crime or anti-social behaviour. Levitas, a member of the PSE: UK research team, comments:
The new rules on working tax credits from the start of the 2012/13 tax year will hit around 212,000 low income families, according to information published by the House of Commons Library. This will reduce their income on average by £2,600 each year.
Up till now, most couples with children have qualified for working tax credit, provided one partner works at least 16 hours each week. But from April 2012 couples will need to work 24 hours between them, with one partner working at least 16.
An updated analysis from the Institute for Fiscal Studies suggests that the combined effect of all the tax and benefit changes effective from April 2012 would be an average loss of £511 per year for households with children. In Tax and Benefit changes, excluding those affecting mainly the very rich, the Institute for Fiscal Studies takes into account a long list of changes, some announced as long ago as the 2010 Budget but only coming into force now.
It shows:
Researchers at Essex University have provided a detailed analysis of the near-doubling of average UK household income over the 40 years up to the start of the global recession in 2008.
A new review of research on families living on a low income finds that the recent recession has generated additional burdens for parents in these circumstances, including increased time pressures, a decline in nutrition, and higher stress levels. The review, Parenting on a Low Income, conducted by About Families, finds that women in particular bear the burden of coping.
The government’s austerity measures and rising inflation are eating into the budgets of low income families, according to the charity Family Action. The report shows that among families helped by the charity, fuel and food costs were placing family budgets under intense pressure, leaving nothing for parents to save for their children’s future, or for fun activities other children could enjoy such as a school disco.