Most low-income working households to be worse off by 2020, and families on out-of-work benefits face losing fifth of income.
The UK’s social security system is rapidly becoming unfit for purpose, as successive cuts leave children and working age adults with an increasingly inadequate safety net for when families fall on hard times, according to a study.
Most low-income working households will be worse off by 2020, while years of social security squeezes mean the income of families on out-of-work benefits will have fallen by up to one-fifth, the analysis by the Fabian Society shows.
At the same time, the cash value of the basic personal tax allowances is on course to have increased by 80% in 2020 from what it was in 2010, meaning that by the end of the decade a typical high-income household will receive more financial support from the state than low-income families reliant on benefits.
Without an urgent overhaul, the crisis in living standards for poorer families will get worse over the next few years as their incomes deteriorate, while child poverty and inequality will rise sharply, even with strong economic growth, the study says.