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Home ownership among middle-income families with kids down 19% in 20 years

By Josie Clarke

The number of middle-income families with children owning homes has fallen substantially in the last 20 years while their benefits have increased, shows analysis by an economic think-tank.

The proportion of middle-income children living in an owner-occupied home has fallen from 69% to 50% since 1994-95, the Institute for Fiscal Studies (IFS) found.

Last year, the same families received 30% of their income from benefits and tax credits, which is up from 22% 20 years ago. This is driven by the increasing generosity of benefits for middle-income families with children, particularly those in work, the IFS report said.

Middle-income families with children are now much more similar to low-income families than they were 20 years ago, and increasingly unlike higher-income families, in terms of their sources of income and their home-ownership rates, the report concluded.

However, this is not because middle-income families are poorer than they were 20 years ago. In fact the median household income of those families is around 40% higher than it was then.

Meanwhile, the incomes of the poorest children have grown faster than those in the middle over the last 20 years, with falls in household worklessness an important driver of the change.

Overall, median net household income for children rose by 39% since 1994.

The findings from the IFS's analysis on inequality in childhood form part of its forthcoming report on Living Standards, Poverty and Inequality in the UK, funded by the Joseph Rowntree Foundation.

Jonathan Cribb, an author of the report and a senior research economist at IFS, said: "In a number of ways, middle-income children are more similar to low-income children than they were 20 years ago.

"This is partly due to higher income growth for poor families with children, driven by falls in worklessness."

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