The average middle-income family in Britain is likely to be nearly £1,800 a year worse-off by 2015, according to the Institute for Fiscal Studies. Families with two children will see a fall of £34 in their weekly incomes, after adjusting for inflation. A childless couple is likely to lose £1,248 a year, or £24 a week.
The IFS also said that over the next three years, less well-off families will be hit harder than those with higher incomes. Those earning less than £12,000 a year will see their spending power fall by 4.5% between 2011-12 and 2015-16. "...much of the pain for lower-income groups is occurring now, or is still to come," said Robert Joyce, a senior economist at the IFS.
The cuts in spending power are because incomes are failing to keep pace with inflation, and because of changes to the benefits system, among them are the benefits cap, changes to housing benefit, the localising of council tax benefit, and the end of disability living allowance.
The IFS also said that over the next three years, less well-off families will be hit harder than those with higher incomes. Those earning less than £12,000 a year will see their spending power fall by 4.5% between 2011-12 and 2015-16. "...much of the pain for lower-income groups is occurring now, or is still to come," said Robert Joyce, a senior economist at the IFS.
The cuts in spending power are because incomes are failing to keep pace with inflation, and because of changes to the benefits system, among them are the benefits cap, changes to housing benefit, the localising of council tax benefit, and the end of disability living allowance.
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