Stagnating UK household incomes and ongoing benefit cuts could cause a “sharp rise” in the number of children living in relative poverty, which has been on the rise since 2011, the Resolution Foundation has warned in a report.
By the end of the parliament in 2022, the number of children living in relative poverty in the UK could hit 37% , The Living Standards Outlook 2019, out today, said.
This would exceed the previous high of 34% in the early 1990s.
“The outlook for low- and middle-income families is particularly tough, with ongoing benefit cuts set to drive down income levels and drive up child poverty,” Adam Corlett, senior economic analyst at the Resolution Foundation said.
By 2022, the majority of children living in single parent families or in larger families, with more than two children, could be living in relative poverty, the outlook warned.
For low-to-middle income working households, real disposable incomes in 2023-24 are on course to be no higher than they were in 2003-04, the outlook said.
It particularly warned of the final year of the benefit freeze, which will reduce working age household incomes by £1.5n and start in April this year.
The impact of the two-child limit on benefits will grow over the remainder of the parliament, the Resolution Foundation added.
It explained while pay growth strengthening to more than 3% in late 2018, is projected to remain “well short of its pre-crisis trend” of 4% over the next five years.
“There’s now a huge risk that their incomes stagnate over the next few years, as the economy’s pay performance struggles to get out of first gear,” Corlett highlighted.
He said that whether or not the economy takes a positive turn, “the government must reassess the continuation of working-age welfare cuts”.
“Otherwise, its non-Brexit record risks being stained by a return to record levels of child poverty,” he warned.
Campbell Robb, chief executive of the Joseph Rowntree Foundation, said the failure of the government to “get to grips” with rising child poverty “seriously undermines what we stand for as a country”.
He said: “It is within the government’s power to stem the rising tide of child poverty before it reaches a record high.
“The benefits freeze is the single biggest policy pushing families into hardship. Low-income families cannot afford another year of their support falling further behind the prices they have to pay.”
The Resolution Foundation also called for the UK to “repeat the employment success of the last two years for the next two” and bring an extra 900,000 people into work and increase incomes.
