The Institute for Fiscal Studies (IFS) has never really been one to deliver much in the way of good news on the economy in the past two or three years, though it’s hardly their fault; with a tough time behind us following the recession, it seems like this slow economic trend is set to continue. At least, that’s how it seems – the IFS revealed today that household income is now at its lowest level in 30 years.
According to the latest report from the organisation, it was discovered that households have suffered one of the biggest drops in income over a 12-month period since 1981. The independent think tank went on to claim that this shift in pay is ultimately down to stagnating wage increases in relation to high inflation. A typical family living in the UK has therefore lost in excess of £500 during the year, affecting property and other core markets needed for a wholesale financial recovery.
The IFS worked out that the most part of the decline was caused by a sharp fall in earnings before pensions, tax credits and benefits were factored in. Net loss for typical households now stands at around three per cent over this 12-month period, essentially meaning the income is comparable to what was found in 2005. While official statistics on incomes will not be published for the last financial year until next May, the IFS staunchly believes this trend is possible.
Sources:
http://www.thisismoney.co.uk/news/article.html?in_article_id=533395&in_page_id=2