Child poverty set to rise by 690,000

A new analysis has shown that tax and benefit changes under the coalition government, combined with low wage growth, will leave 690,000 more children living below the minimum income standard by 2015.

The analysis was commissioned by the TUC from the independent Landman Economics consultancy. It examines the current and future impact of various tax and benefit changes since 2010 – including universal credit, direct and indirect tax changes and real wage growth – on the incomes of different households and family types.

Key findings

  • 690,000 more children will be living below the minimum income standard (MIS) – the level of income needed to achieve a minimum acceptable standard of living – by 2015. The current MIS for a lone parent with two children is £23,992 a year, and £24,643 for a couple with one child.
  • Most of the impact comes from government tax and benefit changes, accounting for 460,000 of the increase.
  • Slower than forecast wage growth pushes another 170,000 below the MIS, while the pay freeze and cap for public sector workers will hit another 80,000.
  • Universal credit, by contrast, will only lift 20,000 children above the MIS.
  • An extra one million families will be living below the MIS by 2015, compared to where they would have been under the policies and forecasts the coalition inherited in 2010. This will include an absolute majority (54.4 per cent) of children.
  • Nine out of ten families will be worse off by 2015, with only the poorest ten per cent of households better off.

Source: Landman Economics, A Bleak Future for Families: Falling Living Standards under the Coalition Government, Trades Union Congress
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