Gingerbread releases impact analysis of Summer Budget on single parent families28 October 2015
According to the latest Gingerbread report, single parents will be most affected by the Summer Budget. This new research looks at the combined impact of the reforms to welfare, tax and pay proposed earlier this year, which will hit 1.3 million of the UK’s working single parent families.
The research carried out by the Institute for Public Policy Research, on behalf of Gingerbread, showed that on average, single parent households will, by 2020/21, lose £1,300 (7.6 per cent) of their income each year. It also proved that working single parents are more affected than non-working single parents in the poorest fifth of households, who will be hit the most in cash terms, and are expected to lose an average £1,610 (13.4 per cent) of their income by 2020/21.
Additionally, as a result of the planned tax credit reforms, (which until recently were due to come in to force in April 2016), one in four single parents – approximately 500,000 people – faced an overnight loss in income. This change would result in poor work incentives for many, in addition to a limited chance of increasing hours or wages -hitting the poorest working parents. Although these reforms have now been delayed, the extent to which the government will amend their tax credit plans prior to the Autumn Statement is unknown.
Chief Executive of Gingerbread, Fiona Weir said:
“A staggering 1.3 million single parents will be worse off as a result of the budget. Single parents are hit harder than other families with low paid single parents hit worst of all.”
“While two in three single parents are working, our findings show those who most need support to ‘make work pay’ will be worst affected by the cuts to tax credits and the work allowance under universal credit in particular.”
“The budget proposals risk turning back the clock on efforts to support single parents into work, destroying any incentive to work extra hours.”
“Longer term, this short-sighted approach will cost the Exchequer more. We are urging the government to pause the reforms while their full impact is properly considered, in particular what they mean for many working families relying on tax credits to make ends meet.”
“Plans as they stand risk making some of the poorest in our society worse off, while also undermining the government’s goal of making work pay.”