UK income in biggest fall since 1981

Graham_Devon

UK households saw their average take-home incomes drop by 3.1% in 2010-11, according to research by the Institute for Fiscal Studies.

It said this was the first fall for five years and was the biggest drop since 1981.

The researchers said the fall was due to the belated effect of the recession between 2008 and 2010, during which incomes had still managed to grow.

The IFS predicted that average incomes would have fallen again during 2011-12.

And the process would continue, with real incomes, after taking account of the effects of inflation, dropping by 2016 back to the levels last seen in 2002-03.

"The fall in median income in 2010-11 of 3.1% was the largest one-year fall since 1981 and returned it to the level last seen in 2004-05," said Jonathan Cribb of the IFS.

The reason for the drop is the fall in real earnings.

Families, couples, single people....all of them are coming under more and more pressure....meanwhile, rises in housing expenditure appear to be celebrated.

http://www.bbc.co.uk/news/business-18447386

purch

Graham_Devon wrote: »

The reason for the drop is the fall in real earnings.

As opposed to a fall in fantasy earnings :eek:

oldvicar

My household income has plummeted and continues to fall.

Nothing to do with earnings or indexed benefits, but as my fixed rate savings mature they cannot be replaced at the same rates.

I suspect many are similary affected and this could be the reason why the article says the IFS states "In fact, the richest households had suffered bigger falls in their incomes than poor households."

On the bright side, the proportion of my income being taken in income tax has plummeted even faster. :j

wotsthat

Graham_Devon wrote: »

The reason for the drop is the fall in real earnings.

Families, couples, single people....all of them are coming under more and more pressure....meanwhile, rises in housing expenditure appear to be celebrated.

http://www.bbc.co.uk/news/business-18447386

Well those with earnings are coming under pressure and as, relatively, less children are in poverty as a result of this it must mean benefits are holding up quite nicely.

To be honest it's the first fall in 5 years and given where we are I think most people are quite sanguine about it.

Talking of celebrating rises in housing expenditure are you going to arrange a street party when the BoE raise rates?

oldvicar

wotsthat wrote: »

are you going to arrange a street party when the BoE raise rates?

I'll bring the Champagne

Generali

Ironically, falling real wages has led to a fall in the number of children 'living in poverty' under the official definition because the wages of high earners are falling faster than those of low earners.

Typical Tories: sticking up for their rich ch...oh hang on.

paulmapp8306

For a lot its down to no pay rises, yet inflation in rthe cost of fuel/utilities/food/clothing etc.

My wage hasnt gone down - but my disposable income has dropped some 10% over the last 3 years (no pay rise).

shortchanged_2

And the most baffling thing about this is that all the so called economic experts predicted (and still continue to predict) continual growth in the economy.

Like I always stated it shouldn't have taken a rocket scientist to see which way the economy was heading with figures like that on show.

MrRee_2

Well, I simply don't believe a word of it .... there is a bounty of riches here.

The_White_Horse

Over the last year, i have really felt a bite in terms of my disposable income - and I did get a pay rise last year (albeit not a great one). The main offenders in my opinion are fuel costs, food costs and utilities. Also, I would guess that anyone not on a lifetime tracker, has seen rising mortgage costs since 2008 rather than falling ones - despite the record low base rates.

In summary, it is all going down the pan and I don't see how it can be stopped. If they want people to spend their way out of the recession, then they need to reduce tax (especially fuel tax) and let people have more money.

They also need to reduce interest rates for people, not for the banks! By this, i mean, say to all Banks - on existing debts you will charge everyone no more that 0.5% on their mortgage for the next 3 years, you will charge no more that 5% on credit cards and charge no more than 1.5% on unsecured loans. This way, the banks get their money back - but not as much profit. The people have more money to spend.

All this against massive cut backs on the public sector and benefits brigade.

the people who should really be feeling the pinch and starving are the benefit layabouts. in fact, they are the only ones doing better out of all this.