One point that has been made in relation to the child benefit changes is that earning £44,000 is not “average”, but puts you in the top 10% of earners in the country. (Indeed, I made it in my own previous post.)
Before we get too carried away with that idea, however, we should bear in mind this is about household income rather than individuals. To see what type of households this change will affect, I went over to the Institute of Fiscal Studies’ excellent “Where do you fit in?” site and entered the following details:
- Family of four: two adults, single earner, two children aged 0-13.
- Household income after tax: £32,860 (equating to £45,000 gross for a single earner, according to this calculator).
- Council tax: £1,200 a year.
According to the IFS, a family fitting that profile is on the 57th percentile of household incomes:
In other words, more or less slap bang in the middle – and with plenty of people only just below that level, whose aspirations to a higher income will be discouraged (to put it mildly) by the prospect of an instant loss of child benefit.