A staggering 13 million families will be worse off by an average £260 a year due to the four-year freeze in working-age benefits and tax credits announced by George Osborne, according to an in-depth assessment of yesterday’s Budget by an influential thinktank.
The Institute for Fiscal Studies said the benefit cuts will not be offset by the new compulsory national living wage, which will rise to £9 an hour by 2020.
It described the overall changes to benefits in the Budget as “regressive” and predicted the next five years of austerity would take “much more from poorer households than richer ones”.
Paul Johnson, director of the IFS, said households receiving tax credits would be “significantly worse off” by the changes unveiled by the Chancellor, even taking into consideration a boost in wages.
The IFS estimated that the four-year freeze to tax credits will hit around 3 million families, making them worse off by an average of £1,000.