Household incomes in the UK are likely to be considerably squeezed over the next year or two, according to a new report.
Compiled by the Institute for Fiscal Studies (IFS), the research estimated that there is likely to be a fall of 3.5 per cent in the median net household income over the course of 2011. This is due to the fact that earnings, tax credits and state benefits are all now being hit as the government attempts to recoup the finances lost during the recession itself.
Indeed, the IFS explained, “the pain was most definitely delayed rather than avoided”.
Robert Joyce, a research economist at the think-tank and a contributor to the report, commented, “The current economic downturn began more than three years ago, and may seem like old news. But, as in other developed countries, the most severe consequences of the recession on UK living standards have only just begun to be felt, and will continue to be felt for years to come.”
The pressure on household incomes could prompt many to keep a closer eye on their savings accounts and ensure that they are getting the best deal possible.
