Low-income households with children and the very rich have lost the most from coalition’s tax and benefit changes

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The coalition government has implemented a set of tax changes which, broadly speaking, have left middle income households better off and have hit high income households. Accompanying benefit changes have reduced the incomes of poorer working age households and reduced the incomes of most families with children.

Taking these tax and benefit changes as a whole, they have reduced the incomes of low-income households with children and the very richest households by the most as a percentage of income. By contrast, middle to higher income working age households have escaped remarkably unscathed on average; those without children have actually gained from the changes.

These are two of the main results from a new IFS Election Briefing Note on the impact of tax and benefit changes on household incomes being published today with funding from the Nuffield Foundation.

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