National incomes fell by more than 13 per cent this year compared to the start of the recession four years ago, according to a new study.
The Office for National Statistics (ONS) said national and household incomes had been affected by the recession as well as high levels of inflation.
National income per head in the second quarter of the year was 13.2 per cent below its pre-recession level at the start of 2008.
TUC general secretary Brendan Barber said: “An over-reliance on the housing bubble and personal debt exaggerated income growth in the run-up to the recession. Now families have been hit by the biggest squeeze in their living standards in nearly a century.
“That’s why high quality jobs and a fairer distribution of decent wages must be at the heart of our economic recovery plan.
“A return to business as usual - where those at the top grab an ever-larger slice of a dwindling earnings pie - will simply create another huge bust.”
Paul Kenny, general secretary of the GMB union, said: “This shows that net national income per head failed to recover in the fourth and fifth years of the current recession and is now a massive 13.2 per cent down since 2008.
“The report also shows that, in the two previous recessions, recovery was well under way by this stage.
“The counter-productive policies adopted by George Osborne, which stalled the recovery he inherited, are entirely to blame for decline in living standards.
“If George Osborne was a football manager he would be sacked by now.”
Unison general secretary Dave Prentis said: “The Government’s austerity agenda is creating a stagnating economy and causing misery to millions of workers and their families.
“The toxic combination of a pay freeze and inflation is undermining growth and making it harder for public service workers, including nurses, care workers, paramedics, dinner ladies, cooks and cleaners, to make ends meet.
“NHS and local government workers deserve better - they have put in for a substantial pay rise to start to close the gap made by rising inflation and the pay freeze.