Monday, 21 March 2011

Recession is hitting the poorest hardest, says IFS report.

A new report out today by the Institute for Fiscal Studies shows that pensioners and poorer households are amongst those that have been the worst hit by the recession. Whilst those earning higher incomes have also seen their income fall, the report also shows that the rich are better able to cope with the brunt of cuts than the poor.

Report summary
Over the last three years there has been a substantial change in the average household income. The report found that from 2008-2011:

• Richest income down 3.8%
• Pensioner income down 2.4%
• Poorest income down 2.1%
• Households with children down 1.1%
• Households without children down 1.8%
• Median income down 1.6%

Across the board, real incomes in the UK fell by 1.6% a year between 2008 and 2011, the study found.


By contrast, the median household income rose 1.6% per year during the previous 50 years.

The UK's poorest, defined as the middle of the bottom 10% of households or the fifth percentile, saw their real income fall by 2.1% between 2008 and 2011, according to the IFS.

That is a fall of £182 per year. In normal times they might have expected their annual income to rise by £428.

Pensioner households saw their average income fall 2.4% OR £456 per year, against an expected rise of £858 per year during normal times

Families with children saw their real income fall 1.1%, or £233 per year. They might have usually seen their income rise by £1,060 per year.

Families without children saw their real income fall 1.8%, or £500. They might have usually seen their income rise by £1,367 per year.

The average working age household without children saw their real income fall 1.8%.

You can view the report by the Institute for Fiscal Studies here: