2008 crash to leave UK families poorer by 5,000-a-year by 2022

news
03 March 2017

UK families would be 5,000-a-year poorer by 2022 than they would have been if the 2008 crash had not happened, according to a think tank.

According to the calculations of the Institute for Fiscal Studies (IFS), the effects of the downturn had wiped off 18 per cent from average median household income.

According to economic analysts, there had been "historically weak" growth over the last nine years as also a "tepid" recovery.

According to the IFS, the sustained slowdown in income growth in the 14 years after 2007/08 was expected to be "unprecedented in at least the last 60 years".

The projections were based on forecasts made by the Office for Budget Responsibility (OBR), the government's independent advisory group.

According to OBR's projections, household incomes might not see any growth for the next two years and rise by only 4 per cent over the next five years.

The group's report added that low-income families with children had fared the worst.

It further added that benefit cuts planned by the government meant that the poorest 15 per cent of the population would have even lower incomes in five years' time than they did now, in a reversal of the trend towards reduced inequality.

The findings had been condemned as representing a ''burning injustice'' by child poverty campaigners. They have demanded an urgent plan from the government, specifically urging the prime minister and chancellor to reform the Universal Credit system.

The IFS expected this ''significant'' increase in child poverty due to the cuts to working-age welfare benefits introduced by George Osborne following the 2015 general election which would affect the standards of living of the poorest families in the country.

Another contributor was the expectation that poorer families would benefit less from the average increase in workers' wages expected over the next five years since a smaller share of their income came from employment.





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