The Institute of Fiscal Studies (IFS) has suggested that the average middle-income family in Britain is likely to be nearly £1,800 a year worse-off by 2015. As well as middle-income families, less well-off families are likely to be hardest-hit between now and 2016. Changes to the benefits system and failings to keep up with inflation are leading to cuts in spending power. Families with two children are expected to see a fall of £34 in their weekly incomes, after adjusting for inflation. A childless couple is likely to lose £1,248 a year, or £24 a week.The study revealed that better-off families suffered disproportionately in the years following the recession. Incomes fell by 6.3% between 2007-08 and 2011-12 for those who earned more than £48,000 after tax and those earning less than £12,000 a year saw their spending power fall by 4.5% between 2011-12 and will see this occur again in 2015-16. Robert Joyce, a senior economist at the IFS, said “Most of the falls in real incomes associated with the recession have now happened for middle- and higher-income groups.”
He went on to say that “But much of the pain for lower-income groups is occurring now, or is still to come.
Although income inequality fell in the years after the recession, it is now on the rise again. A study by the Office for National Statistics (ONS) shows that 28% of adults aged 45 to 64 living in south-east England live in households with wealth greater than £1m (The figure includes the value of property). By contrast, in north-west England, the proportion of people with such wealth is only 14%.The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.Setfords Solicitors are a national full service law firm, with family law solicitors in Woking and across the country.