New analysis by the Resolution Foundation suggests that low-income families with children will lose out the most if the UK Government uprates certain benefits by earnings growth rather than inflation in the Medium-Term Fiscal Plan on Monday, October 31,
The think tank said that nine million UK households containing 30 million people will be affected if benefits rise in line with earnings (5.5%), which the UK Government has been considering - seven million of those households contain someone in work. It said an uprating by earnings, amounting to a real-terms cut, would set the typical incomes of the poorest fifth of households back to levels not seen since 2000-01.
It added that this would represent an “unprecedented period of living standards stagnation” for millions of the poorest families. How much to raise benefits by is the latest issue that is dividing the Tory party, with the UK Government refusing to rule out giving benefits claimants a real-terms cut to their incomes.
