Financial crisis hits incomes

This is what you need to know…

A new report suggests typical household incomes in the UK will not grow over the next five years, this is due to the financial crisis.

The Institute for Fiscal Studies predicts that median income will be four per cent higher than it currently is now.

It says, from the start of the crisis to 2021, households will be hit with the worst income squeeze for 60 years.

People will be £5,000 worse off than they might have expected.

Tom Waters, one of the authors of the report, said: “If the OBR’s forecast for earnings growth is correct, average incomes will not increase at all over the next two years,”

“Even if earnings do much better than expected over the next few years, the long shadow cast by the financial crisis will not have receded.”