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Middle-class families 'to be £4,000 worse off'

Middle income families will be more than £4,000 worse off this year as a result of spending cuts and the struggling economy. A study has found that households on middle-range salaries will be much worse affected by rises in living costs than the rich or poor over the next decade

This is because their wages are unlikely to rise in line with the growth in the economy. However, those on higher salaries will be able to profit from the growing economy – and the poor will be cushioned by benefits.

According to the research, this year working couples with children will be up to £4,250 worse off. The shortfall comprises £2,750 in public service cuts and £1,500 in low wage rises, inflation, higher taxes and benefits cuts.

Families tend to lose more than those without children as they  use more public services. They will be affected by increased charges for swimming and sports centres, parking fees and the axing of council-run children’s services, which were once free.

The Resolution Foundation, an independent research group, found that inflation over the past decade has had more impact on families on low to middling incomes – defined as a couple with no children earning between £12,000 and £30,000 or a couple earning up to £48,000 with three children. These families have been £150 worse off every year since 2000.

It also concluded that 41 per cent of young low-to-middle earners live in privately rented accommodation compared with 14 per cent in 1988 – because fewer can get on the property ladder.

The Foundation also found  average pay was likely to be no higher in real terms in 2015 than it was in 2003.

Adjusted for inflation, average wages of full-time employees were £25,570 in 2003 and will be £25,559 in 2015, it said.

Read more about this at the Mail Online