Lack of support will lead to poverty of 1.3 million people, economists warn

About 1.3 million Britons find themselves in absolute poverty due to the cost of living after the chancellor failed to offer more support to low-income families in his spring statement, the Resolution Foundation said.

This is the first time outside of a recession when poverty has risen so dramatically. Wages are not keeping pace with inflation, which peaks above 8 percent next month and an average of 7.4 percent this year. The rise in the cost of living is due to the rise in taxes in April. About half a million children will be among those who will fall into poverty as a result of this pressure on households, according to the think tank.

“The decision not to focus on those most affected by rising prices will severely affect low- and middle-income households: 1.3 million people, including half a million children, will fall below the poverty line next year,” they said. Thorsten Bell, Executive Director of the Resolution Foundation.

Next fiscal year, the average working family will lose £ 1,100, or a 4 per cent drop in their incomes, an analysis of the Chancellor’s spring statement showed. The picture is more extreme for the poorest quarter of households, where 6 percent of their income will be destroyed by rising costs and taxes.

While in his speech the chancellor focused on tax cuts, raising the threshold for contributions to national insurance and promising to bring down income tax on pennies ahead of the next election, only one in eight workers will actually see their tax bills reduced by 2025. .

“Despite the dramatic reduction in income tax by 1 pension, the reality is that the Chancellor’s tax changes mean that seven out of eight workers will see their tax bills rise. These taxes mean that the Chancellor can point to rapid fiscal consolidation and a significant margin against his fiscal rules, ”Mr Bell said.

It is also the worst parliament in history with a sharp drop in living standards, according to the Resolution Foundation, household incomes should fall by 2 percent by 2025, which is twice as much as during the financial crisis.

“In the face of the cost of living crisis, which seems to make this parliament the worst in the history of household incomes, yesterday the Chancellor came to the newsletter, promising to support the cost of living today and tax cuts tomorrow. Significant measures have been announced on both points, but the policy is not in line with rhetoric, ”Mr Bell said.

This came after the Office of Expenditure Budget Responsibility found that consumers in the UK were facing the worst drop in purchasing power since the record began in 1956.

Lack of support will lead to poverty of 1.3 million people, economists warn

Source link Lack of support will lead to poverty of 1.3 million people, economists warn

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