Families on low incomes face a "decade of sharply declining living standards" as a result of George Osborne's Budget, according to a report published today by the Joseph Rowntree Foundation.
The research found that while people over 25 in work and pensioners will benefit overall, those who are out of work face a sharply growing gap between their income and the amount they need for a basic living standard.
An out of work couple with two children will have just 52 per cent of the money they need in 2020. This will mean they are £221 short of what they need, compared to £163 short (62%) in 2010 and £197 short (57% today.)
A single person who claims out-of work benefits will get 35 per cent of what they need in 2020. This will mean they are £118 short per week, compared to £107 short in 2010 (41%) and £110 short (40%) today.
Julia Unwin, the chief executive of the JRF, said: "The Summer Budget has transformed the relationship between pay, benefits and work incentives. The National Living Wage is a game-changer for some on low incomes as the new, higher rate will make work pay for more people.
“But the wage rise comes hand-in-hand with changes to in- and out-of-work benefits. Families will only be able to make ends meet if they have two parents in full-time work, but those who are able to find extra work will face a difficult juggling act as they try and make longer hours fit around family life. Lone parents, even those working full time, and people who are searching for work face a decade of sharply declining living standards."
Last week a seperate report by the Resolution Foundation also warned that Osborne's welfare crackdown will leave the poorest families thousands of pounds worse off even after introducing a the National Living Wage.
In order for familes on low incomes to have a better standard of living, the JRF says both parents will have to work full time.
The Foundation has said for this to happen there needs to be more high quality, flexible, affordable childcare as well as employers to pay the higher, voluntary Living Wage where affordable.
Despite the financial trouble for out of work families, the JRF report concludes there are also winners. A single person aged over 25 who works full time will have 97 per cent of what they need in 2020, leaving them just £6 short of what they need every week, compared to £54 today.
Double-earner families who both work full time and have two children will have 93 per cent of what they need in 2020, leaving them £34 short of what they need, compared £75 today.
And pensioners will have 106 per cent of what they need in 2020, leaving them with £15 moret han they need every week, compared to £9 less (96%) today.