More than a million to be pushed into poverty, says think tank

More than a million people are set to be pushed into poverty because of the cost of living crisis, according to a think tank.

1.3 million people will fall into absolute poverty next year because they can't afford basic necessities, according to the Resolution Foundation.

It said that households would be squeezed by rising prices and lack of support for those on low incomes.

In his Spring Statement, the chancellor promised that the government would stand by struggling families.

The measures announced by the chancellor were described as a big but poorly targeted policy package by the think tank.

On Wednesday, Sunak raised the threshold at which workers start paying National Insurance from 9,600 to 12,000.

Torsten Bell, the Resolution Foundation's chief executive, said that those measures would provide some help to families on higher and middle-incomes.

The National Insurance rise of 1.25p in the pound was resisted by the chancellor.

In the next financial year, 1.3 million people, including 500,000 children, will be pushed into absolute poverty, according to a new analysis by the Resolution Foundation.

Torsten Bell said that it means we are all getting worse off, and at the bottom end you are having to cut essentials because you don't have a lot of luxury spending. I think that is serious.

The typical household income will fall next year after accounting for rising costs, according to the foundation.

During the Spring Statement, the chancellor announced that he would give 500m more to local councils to help vulnerable people.

It will look like an odd decision not to provide further support, given we know where the impact of the next year is going to be felt, said Mr Bell.

The Office for Budget Responsibility warned that people face the biggest drop in living standards on record as wages fail to keep up with rising food, energy and transport costs.

Inflation, which measures the change in the cost of living over time, is predicted to hit a 40-year high in the final three months of 2022, according to its latest forecast.

Living standards will not recover to their pre-pandemic level until at least 25 years from now, due to rising prices and tax hikes.

The shadow chancellor said that Mr Sunak had failed to appreciate the scale of the cost of living crisis.

In eight days, people's energy bills will be rising by 54%, and in two weeks the chancellor's tax hike will start hitting working people.

His National Insurance tax rise was a bad idea last September and he admits it is even worse today.

Mr Sunak promised the government would stand by families struggling with the cost of living and pointed to the energy bill rebate he had announced previously, as well as the higher National Insurance tax threshold that will give a tax cut in July.