Low-income families could see their benefits slashed by hundreds of pounds should Britain vote to leave the European Union later this month, the National Institute of Economic and Social Research (NIESR) said on Thursday (9 June).

According to the economic think tank, some households could lose up to £2,771 ($3,290, €2,289) a year, as a decline in national income could see the government implement drastic cuts to the welfare budget over the next three and a half years.

Basing their report on existing forecasts, published from seven separate sources, NIESR economists suggested Britain's national income could decline 6% by 2020 in the event of a Brexit, compared to what it would have been otherwise. If the forecast was to be confirmed, and assuming the government would stick to its pledge to balance the books by 2019-20, Downing Street would have to save approximately £44bn by the end of the decade.

According to NIESR, a sizeable chunk, approximately 25% in NIESR's estimates, of that £44bn would come from the welfare budget.

"Based on these assumptions, our results show that a disproportionately large share of the costs of Brexit is likely to fall on low-income households," said Angus Armstrong, a former Treasury official and one of the authors of the report.

By NIESR's calculations, saving 25% from the welfare budget would mean the biggest cut in benefit payments and tax credits for a lone parent of working age with two children would be £1,386 a year. Meanwhile, the minimum for a couple, both working and with no children, would be £465.

However, if the savings coming from the welfare budget were to amount to 50%, then the biggest cut would be £2,771, and the smallest would be £930.

"The effect on low-income families is likely to be large," said NIESR's economist Katerina Lisenkova.


Type of claimantLoss if 25% of cuts come from welfare budgetLoss if 50% of cuts come from welfare budget
Single, working age, no children£600£1,200
Couple, working age, no children£465£930
Single, unemployed, no children£558£1,116
Couple, working age, two children£1,211£2,422
Lone parent working age, two children£1,386£2,771

The think tank's findings were swiftly dismissed as not credible by the Leave campaign. "This is yet another report from a former supporter of the euro masquerading as new research that is simply recycling and repackaging previous reports," said Matthew Elliott, chief executive of Vote Leave.

"That means the same dodgy assumptions of establishment economists and the Treasury underpin the findings – it is the same people who predicted the world would end if we did not join the euro."