Average household income down 1.6%

The average British household has seen its real-terms income fall by £365 in the worst three-year squeeze since the early 1980s, research suggested today.







The Institute for Fiscal Studies (IFS) found that the income of the median UK household had fallen 1.6% since 2008.



During the previous half-century, the average income rose by 1.6% each year.



The IFS study for the BBC also suggested that those among the poorest 10% saw real incomes fall by 2.1% between 2008 and 2011, a drop of £182 per year.



But the richest households fared even worse, with those in the top 5% of the income scale seeing a fall of 3.8% over the three years, equivalent to an annual decline of £2,230.



Families with children saw average income fall by 1.1%, or £233 a year. They would usually have expected income to rise by £1,060 a year.



People have been hit by earnings failing to keep pace with inflation and low interest rates.



Forthcoming tax and benefits changes are expected to increase real-terms incomes, with the median household being £120 better off, the IFS forecast.



But the think-tank's director, Paul Johnson, said it is likely to be 2013 until incomes start rising.



"Given what the Office for Budgetary Responsibility is currently forecasting about earnings, and given what we know about the Government's plans for tax rises and benefit cuts over the next couple of years, it certainly looks like it's going to be a couple of years before we start to see incomes rising," he told the BBC Radio 4 Today programme.



"If that's the case, it looks like we will have a five-year period in which incomes have not risen, which will be the first time we have seen that for about 40 years."

With the budget coming up and household incomes falling, are you in the 'squeezed middle' and looking for help? We're trying to find case studies to whom our personal finance expert can offer assistance this week. Email Kevin Rawlinson at k.rawlinson@independent.co.uk to find out more.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Software Developer

£27500 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Telemarketers / Sales - Home Based - OTE £23,500

£19500 - £23500 per annum: Recruitment Genius: Experienced B2B Telemarketer wa...

Recruitment Genius: Showroom Assistant

Negotiable: Recruitment Genius: This global company are looking for two Showro...

Recruitment Genius: Telesales Executive - OTE £25,000

£15000 - £25000 per annum: Recruitment Genius: This publishing company based i...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor