Average Household Income Down 1.6%

21/03/2011 18:43 | Updated 22 May 2015

The typical British household's income has fallen by 365 pounds since 2008, the Institute for Fiscal Studies has revealed

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

The Institute for Fiscal Studies (IFS) found the income of the median UK household had fallen 1.6 each year.

The think-tank's study for the BBC also indicated that those among the poorest tenth of the population saw real incomes fall by 2.1, 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 IFS director Paul Johnson said it is likely that incomes will not start to rise until 2013.

"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."


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