UK tax and benefit changes worsening inequality, IFS warns

Institute for Fiscal Studies says that in-work benefits help close the gap between rich and poor over a worker's lifetime

A leading thinktank has warned the government it risks worsening inequality during workers' lifetimes by cutting tax credits and reducing income tax rates for the richest.

The Institute for Fiscal Studies said the long-term positives of higher in-work benefit payments were clear, citing a study of workers' finances over the past 70 years. In the absence of higher income tax rates, top-up payments from tax credits and other in-work benefits were the main reason the income gap closed over a worker's lifetime.