BRITAIN’S poorest families will suffer the most in the next recession because of cuts to welfare payments, the Institute for Fiscal Studies (IFS) warns today.

Tory changes to social security — such as universal credit, the freeze on working-age benefits and cuts to child tax credit — mean low-income households will have significantly less “insurance” if earnings fall.

The poorest households will lose an average of 53p after tax for every £1 fall in their pre-tax income when recession hits, up from 39p under the current arrangements.

The government’s own Office for Budget Responsibility puts the likelihood of recession hitting in any five-year period at 50-50.

Those with three or more children will be harder hit than after the 2008 financial crisis, when tax credits and in-work benefits meant that inequality actually fell.

Shadow work and pensions secretary Debbie Abrahams said: “This Conservative government has made the poorest pay for its failing austerity while allowing the wealthiest to avoid billions in tax.”