Family income worst since 1960s: report
Average incomes have fallen to near-record levels, lower-income families are worse off, and earnings will continue to plummet, a report from the Institute for Fiscal Studies has claimed.
The 130-page report, Living Standards, Poverty and Inequality in the UK: 2012, paints a gloomy picture for living standards beyond 2012, suggesting that household income and earnings will continue to fall and then stagnate until 2015.
The research reported sharp falls in average household incomes in 2010/2011. Median income fell by 3.1 per cent to £419 a week from £432 a week, while mean household income fell by 5.7 per cent, compared to the previous year.
The figures represent the largest one-year fall in median income since 1981 and the largest one-year fall in mean income since data began in 1962.
The report said falling income had been driven by weak earnings, with a decline of 7.1 per cent in 2010/2011.
It also forecast that household income would continue to fall and would be lower in 2015/2016 than it was in 2002/2003.
If the predictions were correct, the report said it would represent the worst period for changes in household income since at least the early 1960s, and probably much earlier.
Gary Lucas, director of London-based Burlington Associates, said the figures also impled that the majority of younger people will not be able to save and invest.
He said: “The golden generation have had it good for a long time with final salary pensions. Those in their 20s, 30s and 40s don’t have defined benefit schemes and are unlikely to retire at an early age with sufficient income.
“My concern is people are living longer, but not healthier, and won’t be able to work for as long as they need to. When they reach their 60s and 70s they will find life difficult.”
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