William Eichler 20 February 2019

Childhood poverty set to hit ‘record highs’

The proportion of children living in poverty risks hitting a record high by the end of the parliament, a shocking new report has revealed.

The Resolution Foundation has warned that, following close to zero growth over the last two years, typical working-age household incomes are not forecast to rise materially over the next two years either.

The think tank’s report, The Living Standards Outlook 2019, said that this ‘bleak forecast’ is driven by largely by weak nominal pay growth which is projected to remain well short of its pre-crisis trend of 4% over the next five years.

The living standards outlook for low-income families is ‘particularly poor’, the think tank warned.

For low-to-middle income working households, real disposable incomes in 2023-24 are on course to be no higher than they were 20 years earlier in 2003-04.

Weak productivity and earnings growth are important factors when understanding the decline in living standards.

However, the Resolution Foundation also notes that Government policy — namely, the benefit freeze and ongoing welfare cuts — is another factor.

The think tank also warns that by the end of the parliament the majority of children in single parent families or in families with more than two children could be living in relative poverty.

Adam Corlett, senior economic analyst at the Resolution Foundation, said: ‘UK households have already taken a £1,500 a year hit to their incomes, compared to pre-referendum expectations.

‘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.

‘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.

‘The UK’s current economic outlook is highly uncertain, and will hopefully surprise on the upside. But whatever direction the economy takes, 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.’

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