UK poverty set to rise in next three years

Child and working-age poverty in the UK is set to rise in the next three years, according to projections from the independent Institute for Fiscal Studies in Child and Working-Age Poverty from 2010 to 2013.  

The Institute for Fiscal Studies (IFS) examines the Coalition government’s reforms in terms of both relative and absolute poverty. The study uses the definitions that an individual is in relative income poverty in a particular year if their household income is less than 60 per cent of the national median household income in that year and an individual is in absolute income poverty in a particular year if their household income in that year is less than 60 per cent of the 2010–11 national median (in real terms). The study, which is funded by the Joseph Rowntree Foundation, forecasts that among all children and working-age individuals, there will be a rise in relative poverty of about 800,000 and a rise in absolute poverty of about 900,000 between 2010–11 and 2013–14.

This conclusion is at odds with the Coalition government’s claim that its reforms will not have a ‘measurable’ impact on child poverty and is accounted for by the fact that the IFS have modelled the government’s planned reforms to Local Housing Allowance whereas the Treasury did not. The reason the Coalition government’s reforms will do more to increase absolute rather than relative poverty in 2013–14 is that they will reduce median income; hence the relative poverty line in 2013–14 will be lower (see Income threshold approach).

The full report (IFS briefing note 115) is available from the IFS website:
Child and Working-Age Poverty from 2010 to 2013

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