Autumn Statement 2015: 2.6m families are £1,600 a year worse off under George Osborne's cuts

UK pound — The IFS says the chancellor has set himself a completely inflexible fiscal target iStock

Around 2.6m families across the UK will be on average £1,600 ($2,418) a year worse off because of the benefit reforms outlined in George Osborne's Autumn Statement, according to the Institute for Fiscal Studies (IFS). The independent think-tank also discovered that 1.9m households would be £1,400 a year better off under the Universal Credit (UC) changes despite Osborne's dramatic climbdown on tax credit cuts.

The research body also warned that measures in the chancellor's Spending Review meant that the end of austerity had yet to come and Osborne's financial plan was one of the tightest in post-war history. The comments from Paul Johnson, the director of the IFS, came after Osborne restated his promise to run a budget surplus by the end of the next parliament in 2020.

But Johnson warned that the chancellor had set himself a completely inflexible fiscal target and the chances of achieving the economic goal would be 50-50. John McDonnell, Labour's shadow chancellor, said: "The day after the spending review the Tory spin is unravelling. We said this was a smoke-and-mirror spending review and we were right. IFS research today shows that George Osborne has not reversed his welfare cuts, he has just delayed them, and 2.6m families will still be on average £1,600 worse off by 2020."

What is Universal Credit?

UC is a new welfare payment which was initially launched in 2013 to replace six existing benefits, including Jobseeker's Allowance and Child Tax Credits, in a bid to simplify the welfare system for claimants. However, the roll-out of the system has been hit with setbacks and Work and Pensions Secretary Iain Duncan Smith has come under criticism.

UC is now available at 70% of all job centres across the country, according to the government. "The new system is designed to ensure people will be better off in work than on welfare and means they can receive support from jobcentre staff both in and out of work," the Department for Work and Pensions said.