This Commentary presents forecasts of relative and absolute income poverty in the UK among children and working-age adults for each year between 2010-11 and 2015-16, and for 2020-21, using a static microsimulation model augmented with forecasts of key economic and demographic characteristics. It updates and extends previous JRFfunded work by Mike Brewer and Robert Joyce, which forecast poverty through to 2013-14, and builds on previous ESRC-funded work by Mike Brewer, James Browne and Wenchao Jin, which simulated the impact of Universal Credit on household incomes.
This exercise is necessarily subject to uncertainties and limitations. Macroeconomic forecasts such as those we make use of here are always highly uncertain, and this is especially true at present; the data available do not enable us to model all of the tax and benefit changes coming in over the next few years precisely, and we cannot fully account for the impacts of behavioural changes that result from tax and benefit reforms; and the underlying survey data used are, of course, subject to sampling error. However, the results should provide a useful guide to what might happen to poverty under current government policies.