Cuts to benefits 'outweigh gains from National Living Wage'

By agency reporter
June 16, 2018

New research from the Institute for Fiscal Studies shows the introduction of the National Living Wage has resulted in fast wage growth for low-paid workers, but recent cuts to working-age benefits mean many working low-income families are worse off overall.

Living standards continue to stagnate as cuts to benefits outweigh gains from the National Living Wage. 

Responding to these new findings, Campbell Robb, Chief Executive of the independent Joseph Rowntree Foundation, the charity who commissioned the research, said: “The National Living Wage has seen low-paid workers receive the fastest pay rise in almost two decades. It is right that as a society we should properly reward people for their hard work and ensure that everyone can achieve a decent and secure standard of living.

“But the National Living Wage alone is not enough to loosen the grip of poverty in our country. Our research has shown that the high cost of living and cuts to working-age tax credits mean many families are locked into a constant struggle to make ends meet despite the rise in wages.

“Today’s research provides further evidence that the most effective way to support people on low incomes is to allow them to keep more of what they earn. By increasing Universal Credit work allowances to their original level, the Government can boost the incomes of 2.5 million families. This would also prevent 310,000 people from being pushed into poverty.”

* Read Living standards and the National Living Wage here

* Joseph Rowntree Foundation


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