Poverty among both children and working-age adults is set to increase significantly from 2013/14, analysis from the Institute for Fiscal Studies has revealed.
New forecasts from the Institute for Fiscal Studies show that the government’s claim that child poverty will not increase over the next two years as a result of changes announced in the Spending Review is broadly accurate. However, poverty among both children and working-age adults is likely to increase significantly from 2013/14.
The IFS has projected the number of children and working age people that fall below both the absolute poverty line (measured at 60% of real terms median income for 2010/11) and relative poverty line (measured as 60% of the median income of that year). They give forecasts up to 2012/13 and up to 2013/14.
The institute points out that the government’s tax and benefit reforms will have the effect of increasing relative poverty (the preferred measure) among both children and working-age adults over the next two years – but the increase among children is likely to be too small to properly quantify.
However, the forecasts also show that absolute poverty among children is likely to increase by around 200,000 over the same period. This differs from the government estimate (showing no increase) because the IFS calculations include the effect of changes to Local Housing Allowance, which were excluded from the Treasury’s projections.
The overall findings show that between 2010/11 and 2013/14 child poverty is projected to increase in both absolute and relative terms. By 2013/14, child poverty is likely to have increased by 200,000 compared to 2010/11, and by 400,000 in absolute terms.
Child poverty currently stands at 2.8 million in relative terms and progress towards the goal of eliminating child poverty by 2020 has stalled. The IFS figures show that child poverty is set to fall by 300,000 up to 2010/11 – but after this, there is projected to be no further progress up to 2012/13 followed by an increase.
Working age adults without children also seem to fare poorly when looking at future forecasts with a 400,000 increase, using both absolute and relative poverty measures, over the next three years. Three quarters of this increase is accounted for by the impact of the government’s planned tax and benefit measures.
The IFS forecasts make for dismal reading when considering the UK’s record on child poverty, which is already one of the worst in the developed world. The recent report by UNICEF shows the UK ranks 19 out of 24 of the world’s rich countries in terms of material well-being of children, performing worse than both Greece and Portugal.
This is all in light of potential changes to the child poverty measurement, which was highlighted in Frank Field’s report ‘The Foundation Years’ which calls for a measure that places less importance on income. But the UNICEF report singles out the importance of income in influencing children’s life chances.
The IFS’s forecasts show the Government risks taking us further off track from achieving the goal of ending low income among families with children.