The impact of austerity measures on households with children

Document type
Browne, James
Family and Parenting Institute
Date of publication
1 January 2012
Families, Poverty Alleviation Welfare Benefits and Financial Inclusion
Social welfare
Material type

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This paper considers the prospects for the living standards of households with children over the period from 2010 to 2015. It then analyses the impact of tax and benefit changes on these households’ incomes and on parents’ incentives to undertake paid work and to increase their earnings. The paper finds that the median income among households with children is set to fall in real terms by 4.2% between 2010–11 and 2015–16. This is greater than the projected fall in overall median income for this period of 0.9%. Median income is projected to fall by more than 4.2% among families with three or more children, households with young children and those living in private rented accommodation, and less than 4.2% among single-child households, those whose youngest child is aged 11 or more and those who own their home outright. Relative child poverty is set to increase between 2010–11 and 2015–16 by around 400,000, and absolute child poverty will increase between 2010–11 and 2015–16 by around 500,000.

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