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Benefits cuts cost poorer households significantly


Changes to taxes and benefits that the current government brought in have cost the average UK household £1,127 a year, according to the Instituted of Fiscal Studies (IFS).

Tax and benefit changes include increased in National Insurance Contributions, substantial cuts to benefits and an increase in the main rate of value added tax. Low income- working aged households were hardest hit, with middle-income working-age households without children gaining the most from the cuts.

The poorest households lost around 4% of their incomes. This is compared with around 3.5% for the next poorest tenth and between 2.5% and 0% for middle-income households. For the richest households, there was a loss of about 2.5% , whereas pensioners remained relatively unaffected.

London was the hardest hit region, with families losing on average £1,042. This was closely followed by south east England, the West Midlands and north west England.

James Browne, a senior research economist at IFS and co-author of the report said: "Whichever way you cut it, low-income households with children and the very richest households have lost out significantly from the changes as a percentage of their incomes.

"Increases in the tax-free personal allowance have played an important role in protecting middle-income working-age households meaning that those without children have actually gained overall."

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