Families with children will be worse off in 2016 than they were 14 years earlier, due to ongoing Government cuts and falling average wages.
An analysis by leading thinktank the Institute for Fiscal Studies (IFS) predicted that average incomes, adjusted for inflation, will fall by 3% this year and further still in 2012.
The stark warning came after public sector strikes disrupted the country on Wednesday and the world’s major central banks announced emergency measures to ease the credit crunch, in a bid to stop another global recession.
The IFS anaylsis showed that the unemployed and pensioners living on state benefits would do better than working families.
Not since the mid-70s have families come near to suffering a similar loss of income as the one now predicted to hit Britain over the next five years, the thinktank said.