A new report published by the Institute for Fiscal Studies (IFS) and funded by the Joseph Rowntree Foundation predicts that there will be 3.1 million children in poverty in the UK by 2013.

The independent research body forecasts that incomes will continue to decline significantly over the next 2 years, amounting to the largest drop in earnings for middle-income families since the 1970s when oil and currency crises crippled the economy. This will result in an additional 600,000 children being pushed into poverty, the IFS warns.

The report makes a distinction between ‘absolute poverty’ – households earning less than 60% of the median national income for 2010/11 – and ‘relative poverty’ households earning less than 60% of the median national income for the year in question. In the UK, 2.5 million children were living in absolute poverty in 2010, according to the IFS.

The IFS forecasts that if Universal Credit scheme is introduced in 2013, the number of children in absolute poverty will fall by 100,000 to 3 million. They also predict incomes will begin to rise for middle earners, although by 2015 they will still be below 2009 levels. The Universal Credit is a system being proposed by the government to replace 6 existing income-related employment-based benefits.

The report also warns that by 2015, the number of working-age adults without children in absolute poverty will have risen to 4.1 million, rising again to 4.7 million in 2020.
The report also concludes that targets (set in 2010) to cut absolute child poverty to 5% by 2020 will most likely be missed by a considerable margin – they anticipate the figure will be more like 23%.