Household incomes returning to pre-recession levels, research finds

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5th March 2015 16:04 - Financial Services

A new study conducted by the think tank, the Institute for Fiscal Studies, has found that the average household income has risen to the sameHousehold incomes returning to pre-recession levels, research finds level it was before the recession.

However, the Institute for Fiscal Studies has noted that it is still 2 per cent below the peak of 2009-2010.

The think tank also noted that household incomes for people of a working age had still not quite reached the same level as that of 2007-2008, after the figures were adjusted to reflect the impact inflation has had.

The only demographic whose income was above the average of 2007-2008 was the over-60s, as pensioners have been shielded from benefit cuts.

It was noted that state pensions are triple-locked, meaning that they increase with inflation, earnings or a 2.5 per cent, whichever is highest. Due to this, many people on pensions have experienced a significant rise in income.

The Institute for Fiscal Studies also found that the standard of living has increased slower than that of previous recessions, mainly due to slow growth in the wages of those who work.

It was also identified that some of the government’s measures, adopted to reduce the deficit, such as benefit slashes and tax inflations, had also had a negative effect on the average household income.

Director of the Institute for Fiscal Studies, Paul Johnson, said of the findings: "It's astonishing actually, that seven years later incomes are still no higher than they were pre-recession and indeed for working-age households, they're still a bit below where they were pre-recession."

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