Tax credits reward parents who work

The Working Families Tax Credit (WFTC) rewarded people who took low-paid or part-time work with extra cash.

Since the introduction of WFTC, the percentage of lone mums in work is up from 41% to 49% the Institute of Social and Economic Research (ISER) said.

As a result the financial position of lone mums had improved, the ISER said.

Job done

On introducing the WFTC in 1997, Chancellor Gordon Brown said it would help encourage mothers back into the workforce and alleviate child poverty.

For lone mums the tax credit has been a big deal. Many are now enjoying better career opportunities Dr Marco Francesconi, co-author of the study

Between 1997 and 2000 the percentage of lone mums working rose dramatically.

However, the percentage of lone mums in the workforce has stabilised since 2000.

"The tax credit seems to have done its work and we could now be at the natural level of employment for lone mums in the UK," Dr Marco Francesconi, co-author of the study, told BBC News Online.

The ISER study found that higher employment levels had helped increase the average income of lone mums by �67 a month.

"For lone mums the tax credit has been a big deal. Many are now enjoying better career opportunities," Dr Francesconi said.

"One interesting thing we found was that women in receipt of the credit were less likely to marry than they were in 1997. Perhaps they have more financial independence."