Families with children to be hit hardest by falling income
Wednesday, 04 January 2012 09:32
New research compiled by the Institute for Fiscal Studies (IFS) and the Family and Parenting Institute (FPI) has found that people with children will be hit the hardest by falling income levels over the next few years.
The median income for a family with children is predicted to fall by 4.2 per cent between 2010 and 2015, which means that a couple with two youngsters will be £1,250 a year worse off.
Families with more than two children, those with under-fives and single parents are likely to struggle the most.
Overall, the median income per household will fall by 0.9 per cent (£215), demonstrating that those without children will not feel the pinch as much.
Between last year and 2015-16, it is estimated that 500,000 more children will fall into poverty, with more than half coming from households where the youngest child is under five.
The more children a family has, the worst off it will be as a result of the government's cuts and price hikes, as three-child households will see their income fall by 6.8 per cent by the end of the study periods.
Changes to taxes and benefits are also expected to take their toll, with the poorest families ten per cent worse off by 2014-15 than they would have been under the old system and single parents set to lose £2,000 a year.
Chief executive of the FPI Dr Katherine Rake said: "These figures reveal the full extent to which families with children are shouldering the burden of austerity.
"Many families will be left struggling to understand why they have been singled out in this way and how this sits alongside the government's ambition for the UK to become a family-friendly nation."
At the end of 2011, the Institute for Fiscal Studies and the Office for Budget Responsibility predicted a decline in real household disposable income of minus three per cent for 2011 as a whole.
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