Wages fell 4.2% in last year

Real wages have fallen 4.2% (equivalent to around £650) over the last year, according to research by independent think tank the Resolution Foundation.

Its annual research, Squeezed Britain, found that even if income growth returns to the strong levels seen in the late 19902 and early 2000s, it will take until 2020 for low to middle-income households to return to to the same levels of disposable income they had before the recession.

In a less optimistic scenario, low to middle incomes will remain stagnant (as they were from 2003-2008) with no real increase from now, even by 2020.

Matthew Whittaker, author of the report, said: “This latest snapshot of what life is really like for families on low to middle incomes shows rising pressure from pretty much all sides.

“Continued low interest rates and the start of a fall in inflation offer only limited respite. This will be far outweighed by further deep cuts to tax credits due this April, which will come as a shock on top of the continued wage squeeze.”

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