Families will see £2,500 knocked off their incomes in three years with more than a decade of rising wealth being wound back by the next general election, a think-tank has claimed.
There will be a 7.4% fall in median household incomes in real terms between 2009/10 and 2012/13, amounting to £48 per week for a couple with two children, and 2015/16's average is predicted to be lower than in 2002/03.
The grim predictions of the effects of austerity measures and a stagnating economy came from the Institute for Fiscal Studies (IFS) after Chancellor George Osborne's autumn statement.
IFS director Paul Johnson said disposable income per capita would still be less than in 2006 by 2015/16. There was 14% growth on that measure in the last worst decade.
Mr Johnson said he was "running out of superlatives" to describe how bad the problems were.
Copyright Press Association 2011