The UK’s leading public finance think tank predicts that 600,000 more children and 800,000 adults of working age will be living in poverty as the result of a ‘large decline’ in real incomes, which will see the biggest drop in household income for 35 years.
It blames changes to the tax and benefits system and the fact that the Government now uses the lower consumer prices index instead of the higher retail prices index as a measure of inflation on which to base the amount claimants receive in means-tested benefits.
The IFS said that median income is expected to fall by around 7 per cent in real terms between 2009-10 (the latest household income data available) and 2012-13.
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