Research Says More Than 250,000 UK Households Will Fall Into Extreme Poverty Next Year

More than 250,000 households in the UK will 'slide into destitution¡¯ next year, taking the total number in extreme poverty to around 1.2million, according to Britain¡¯s oldest independent economic research institute NIESR (National Institute for Economic & Social Research).

This is unless the government acts to help the poorest families hit by the energy price shock amid the spiralling cost of living crisis.

More than 1.5 million households will see the rise in food and energy bills outstrip their disposable income, forcing them to rely on savings or extra borrowing to make up for the shortfall, said the British think tank, as per a report in The Guardian. The think tank blamed welfare spending cuts since the Brexit vote in 2016 for leaving millions of families in a vulnerable financial position.

NIESR said ¡°To prevent a jump in poverty levels, the UK government must raise universal credit payments by ?25 a week immediately while handing the 11.3 million lowest-income households a one-off cash payment of ?250¡±

Inflation, which NIESR forecasts inflation to average 7.8% this year after peaking at 8.5% in April 2022, will fall next year, but the UK government¡¯s reliance on loans to support poor families, which must be repaid over subsequent years, will mean poverty levels remain elevated, as per The Guardian report.

Professor Adrian Pabst, NIESR¡¯s deputy director for public policy, said ¡° To stop an additional 250,000 households from sliding into debt and destitution, the chancellor should instate a ?25 per week universal credit uplift for at least 6 months¡±, as per The Guardian report.

PA

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What NIESR's Director Said

NIESR director Professor Jagjit S Chadha said the UK government¡¯s policies could be directly blamed for harming the real incomes of UK households.

Chadha has reportedly been a longstanding critic of the government¡¯s austerity measures. He said successive governments since 2008 should have been more ambitious rather than leave much of the job of spurring economic growth to the Bank of England.

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Director Chadha also said ¡°Time and again we have been told that there is little room for manoeuvre when the weather turns unpleasant,¡± when the UK government ¡°had a ?20bn borrowing capacity under its own fiscal rules that could (have been) used to support poorer families¡±.

CNN

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