By Mike Brewer, Alissa Goodman, Jonathan Shaw and Luke SibietaThis report from the Institute for Fiscal Studies, which analyses the households below average income statistics, shows slow growth in average living standards. Between 1996 and 2002.income inequality rose on a variety of measures and reached its highest level since comparable records began in 1961. Since 2002, income inequality has fallen slightly to a level similar to that of 1996. The net effect over the last eight years has been to leave inequality effectively unchanged.
There was a rapid fall in pensioner poverty in the period 1996/2002. This partly results from increased government spending on pensioner benefits, such as the pension credit and the winter allowance. But the fall is also in part due to the fact that those individuals who have reached retirement age since 1996 have tended to be better off than their predecessors.
The report also examines why child poverty has fallen, and why it did not fall enough for the child poverty targets for 2005 to be met. Child poverty fell by 700,000 since 1998 to reach its lowest level since the late 1980s. But the government fell 100,000 children short of meeting its target for 2005. The main factors contributing to the decline in poverty since 1998 are the substantial declines in the proportion of children in workless households and large falls in the risk of poverty for children in workless families.
Published by the Institute for Fiscal Studies and available at: http://www.ifs.org.uk/comms/comm101.pdf