UK household incomes to plummet for years to come, new reports find
By
Barry Mason
9 March 2017
According to a report, “Living Standards, Poverty and Inequality in the UK: 2016-17 to 2021-22,” by the Institute for Fiscal Studies (IFS), workers in Britain will remain in the grip of a squeeze on incomes, which began with the global financial crisis of 2007/8.
The IFS concludes that cuts will continue until 2021, making it the most prolonged squeeze on income for 60 years. It is estimated that, on average, households will be £5,000 a year worse off than they would have been if the financial crisis had been avoided.
The report, compiled using official government data on household incomes for the year 2014-15; the most recent set of such figures, examine the policy implications of government fiscal measures. The researchers augmented this using other data sources and changes in legislation to produce an up-to-date picture.
In the introduction to the report the IFS noted, “The latest available data show real median incomes in 2014-15 just 2.2 percent above its 2007-08 level. This poor performance is largely due to wages (and ultimately productivity)—the large falls in real wages that characterised the recent recession and the weakness of real pay growth since… it is no surprise that the picture looks even worse if we exclude pensioners: among the rest of the population, average incomes were essentially the same in 2014-15 as back in 2007-08.”
The report notes that the decline in real incomes is due to the austerity policies of successive governments. Their impact will worsen as they are projected through in the coming years. It forecasts that nearly one in three children will be living in poverty, predicting child poverty rates of 30 percent by 2022.
The report…