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<p>Latest statistics to 2016 show 3.2 million working-age adults in working families
living in relative low income before housing costs. This compares with 2.8 million
in 2010. In terms of percentages, in 2016 this equates to 8% of all working-age adults
and similarly in 2010 this was also 8% of all working-age adults.</p><p> </p><p>However
there are currently record numbers of people in work – 2.8 million more since 2010.
As a consequence, this has resulted in some increases in the number of individuals
in work and in low income.</p><p> </p><p>We realise that some people first moving
into work might be in low income in the short term. But by being in work they have
the opportunity of increasing their earnings, rather than just being left to live
a life on benefits.</p><p> </p><p>We are introducing Universal Credit and this is
revolutionising the welfare system by making work pay. Universal Credit contains structural
incentives to encourage people to work more and earn more. It is simple and as people’s
earnings increase their payments reduce at a steady rate (there are no cliff edges),
so it is clear to them that they will always be better off working and earning more.</p><p>
</p><p>We have also increased the tax free Personal Allowance so that people can earn
more and keep more of what they earn and introduced the National Living Wage. The
tax-free personal allowance will be £11,500 in April 2017, a major step towards our
goal of reaching £12,500 by 2021. As of April 2017, a typical basic rate taxpayer
will pay over £1,000 less income tax, compared to 2010-11. This will be an income
tax cut for over 30 million people and will mean taking 4 million of the lowest paid
out of income tax completely during the last Parliament. The introduction of the National
Living Wage, means a full-time worker previously on the national minimum wage is now
£900 a year better off.</p><p> </p><p>These changes, combined with the highest employment
rate on record – mean that work continues to be the best route out of low income.
Just 6% of working-age adults in households where everyone is working are in relative
low income before housing costs, compared to nearly half (46%) of adults in workless
households.</p>
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