A new report from the Institute for Fiscal Studies (IFS) suggests that while better-off families in work suffered disproportionately in the years following the recession, people on lower incomes are likely to be hardest-hit between now and 2016, with those earning less than £12,000 a year seeing their spending power fall by 4.5% between 2011-12 and 2015-16.

In the UK, as elsewhere, it was difficult to detect the immediate impacts of the recession on net household incomes.  But the pain was merely delayed until 2010–11 and beyond. IFS finds that the major difference between income groups is in the timing of the reductions in income, rather than in their magnitude. For those in the middle and upper parts of the distribution, dependent mainly on wages for their income, falls in real income mainly happened between 2009–10 and 2011–12.  However, for those towards the bottom, dependent more on benefit incomes, falls in real income will happen largely as a result of the post-recession fiscal tightening between 2010–11 and 2015–16.

For more information and research on poverty and social exclusion, listen to our podcast on Poverty with Ruth Lister and Fran Bennett, and also take a look at Society Central, a social policy news website and PSE, a website being developed to support the Poverty and Social Exclusion in the United Kingdom research project funded by the Economic and Social Research Council.