A `step back in time` for household incomes

A study by the Institute for Fiscal Studies (IFS) has revealed that UK households could be facing the biggest drop in income for three decades, the BBC reports.

While the institute said median take-home incomes actually recorded an increase during the recession, it was "entirely possible" that median incomes dropped by 3% in the 2010-11 financial year.

The IFS said that if this is correct, it would be the largest such fall since 1981, and would take the median take-home income back down to levels seen in 2004-05.

The impact of the recent recession, the IFS said, is only just being felt.

A spokesperson at debt management company Gregory Pennington said: "A fall in take-home income can be worrying for anyone - but particularly for those who are already struggling with their finances.

"We would advise anyone struggling with the high costs of living, or perhaps struggling to service any unsecured debts they`re carrying, to seek professional advice without delay."