The Institute for Fiscal Studies has said that 2.6 million working families will be an average of £1,600 worse off a year thanks to George Osborne's policies.
Osborne's planned shift from tax credits to universal credit will mean that many families are worse off than they would have been.
"We estimate that in steady state universal credit will now involve 2.6 million working families being an average of £1,600 a year worse off than they would have been under the current system while 1.9 million will be £1,400 a year better off," Paul Johnson, director of the Institute for Fiscal Studies, said.
The IFS released its much-anticipated analysis of the Autumn Statement a day after Osborne's announcement. It started by saying that the latest Treasury policies are absolutely not the end of austerity. "The first thing to say is that this is not the end of "austerity". This spending review is still one of the tightest in post war history," Johnson said.
The Resolution Foundation had earlier estimated that the move to universal credit will cost working households £1000 on average in 2020.
Effects of the cuts to Tax Credits
Tax, benefit and minimum wage changes in the summer budget of the Autumn Statement will cost 50 per cent of households £650 on average in 2020, the Foundation says, while the richer 50 per cent of households will lose nothing.
- More about:
- Autumn Statement
- spending review
- Universal Credit
- George Osborne
- Institute for Fiscal Studies