{"id":109,"date":"2015-07-01T08:54:39","date_gmt":"2015-07-01T08:54:39","guid":{"rendered":"https:\/\/blog.lboro.ac.uk\/crsp\/?p=109"},"modified":"2015-07-01T08:54:39","modified_gmt":"2015-07-01T08:54:39","slug":"incomes-improve-against-mis-a-welcome-but-brief-respite","status":"publish","type":"post","link":"https:\/\/blog.lboro.ac.uk\/crsp\/2015\/07\/01\/incomes-improve-against-mis-a-welcome-but-brief-respite\/","title":{"rendered":"Incomes improve against MIS: a welcome but brief respite"},"content":{"rendered":"

Zero inflation is great news these days for low income families.\u00a0 This is because more and more government policies affecting income are being set without regard to the inflation rate. \u00a0If you work on the minimum wage, you can expect your pay to rise 23 per cent and tax allowance 18 per cent by 2020 to meet Conservative election pledges.\u00a0 If you\u2019re a pensioner, the Triple Lock will increase your state pension by at least 13 per cent in that period. \u00a0Whether this makes you much better off will depend on how much prices rise. \u00a0Conversely, the pledge of a freeze in working age benefits and tax credits will cause those elements of income to fall, in real terms, by the inflation rate.<\/p>\n

The experience of 2015, looked at in isolation, demonstrates this point. \u00a0The budgets published in today\u2019s update of the Minimum Income Standard<\/a> as what households need for an acceptable standard of living have barely changed. \u00a0So in the last year in which working-age benefits rise by 1% – seen as a mean measure when it replaced index-linking in 2013 \u2013 this is making recipients very slightly better off relative to their needs. \u00a0It certainly makes a change from the steady deterioration of the past few years. \u00a0If you\u2019re an out of work lone parent your income is 43 per cent short of the minimum budget today, compared to 32 per cent in 2008. \u00a0The same lone parent working full time on the minimum wage and paying for childcare was only 2 per cent short in 2008, but this has grown to 14 per cent.<\/p>\n

Even the return of modest inflation will extend this deterioration for such families, as a result of the benefits freeze. \u00a0True, higher minimum wages and tax allowances will help those in work, but much of this will be clawed back for those on Universal Credit, which will be reduced by 65 per cent of any increase in post-tax pay.<\/p>\n

In next week\u2019s Budget, we\u2019ll learn whether rumours of serious cuts to the Child Tax Credit are true; if they are, the incomes of the worst-off families will take a further dive.\u00a0 If they do, the only solace for such families is that more generous treatment of childcare is round the corner. \u00a0I suspect that many of them have stopped even hoping for greater largesse from the state. \u00a0But as they struggle to pay for the essentials of life, they should certainly be hoping for low inflation.<\/p>\n","protected":false},"excerpt":{"rendered":"

Zero inflation is great news these days for low income families.\u00a0 This is because more and more government policies affecting income are being set without regard to the inflation rate. \u00a0If you work on the minimum wage, you can expect your pay to rise 23 per cent and tax allowance 18 per cent by 2020 […]<\/p>\n","protected":false},"author":210,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[9,13,15],"tags":[25,28,30],"class_list":["post-109","post","type-post","status-publish","format-standard","hentry","category-inflation","category-mis","category-universal-credit","tag-inflation","tag-mis","tag-universal-credit"],"_links":{"self":[{"href":"https:\/\/blog.lboro.ac.uk\/crsp\/wp-json\/wp\/v2\/posts\/109","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.lboro.ac.uk\/crsp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lboro.ac.uk\/crsp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lboro.ac.uk\/crsp\/wp-json\/wp\/v2\/users\/210"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lboro.ac.uk\/crsp\/wp-json\/wp\/v2\/comments?post=109"}],"version-history":[{"count":0,"href":"https:\/\/blog.lboro.ac.uk\/crsp\/wp-json\/wp\/v2\/posts\/109\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lboro.ac.uk\/crsp\/wp-json\/wp\/v2\/media?parent=109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lboro.ac.uk\/crsp\/wp-json\/wp\/v2\/categories?post=109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lboro.ac.uk\/crsp\/wp-json\/wp\/v2\/tags?post=109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}