Incomes to fall by up to seven per cent

A new report by the Institute of Fiscal Studies has revealed that more Brits are set to fall into poverty as the credit crunch continues to bite.

The research forecasts poverty for each year between 2010-11 and 2015-16, and for 2020-21 and takes into account all tax and benefit policies, including universal credit.

It revealed that the year 2012-13 is likely to be dominated by a significant fall in real incomes across the income distribution, with absolute poverty set to rise by 600,000 children and 800,000 working-age adults.

Medium income, meanwhile, is expected to fall by seven per cent, the largest three-year fall for 35 years.

Tim Nichols, spokesman for the Child Poverty Action Group, said that the "folly" of political promises that boom and bust was over led ordinary people to "forget that poverty can go up as well as down".

"But now we must all take very seriously the fact that middle income families are already falling into poverty as jobs are lost and support like tax credits is cut back," he said. 

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2011-10-17 13:12:57 © Moneyextra.com