Andrew Hood

We analyse the debt holding position of UK households, setting out a definition of "problem debt" and analysing those households captured by this measure.

This presentation was given at an IFS briefing following the Autumn Statement 2016.

A lower cap on the total amount of benefits that households can receive comes into force tomorrow, affecting four times as many households as the previous benefit cap. Like the previous cap it will apply to out-of-work households of working age (with some exemptions, mainly due to disability). The cap will now be £23,000 a year in London and £20,000 elsewhere (there are lower caps for single adults without children set at £15,410 in London and £13,400 elsewhere). This compares to £26,000 nationwide under the previous cap, which has been in place since 2013. In this observation we look at the implications of a lower cap for government spending, the impact on the households affected, and how they might respond.

This morning the Office for National Statistics announced that inflation, as measured by the CPI, was 0.9% in the year to September. This is only slightly higher than the 0.6% the Office for Budget Responsibility forecast in the March Budget. But since then many forecasters – including the Bank of England – have revised up their forecasts for future inflation as the sharp drop in the value of the pound since the referendum is expected to push up prices. This observation focuses on one consequence that higher inflation would have: the fact that it would reduce the real incomes of working age families receiving benefits that the Government has frozen in cash terms through to March 2020.

The 2016 Budget included a policy designed to help low-income working families, known as ‘Help to Save’. This observation examines whether the policy is likely to help those who are not currently saving enough and to encourage them to save more, or is instead an opportunity for those who already have savings (or would save anyway) to receive a government subsidy.

This presentation was given at the launch of the IFS report Living Standards, Poverty and Inequality in the UK: 2016 on 19 July.