Income set to carry on behind pre-crash levels

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HOUSEHOLD INCOMES will not return to their pre-crash levels until early 2016 which is later than official forecasts, an economic think tank warns today.

The Resolution Foundation claimed that while it expects real household incomes to grow steadily during the course of 2015, they will still not match the pace of growth seen in the early 2000s.

Incomes are expected to rise by 1.7 per cent over the course of the year, meaning that they are unlikely to regain the level they were before the crash of 2008 until early in 2016. That contrasts with official estimates - based on figures from the Office for National Statistics - which suggest a return to pre-crisis income levels by the middle of next year.

The Resolution Foundation has, however, challenged the way the ONS measures real household disposable income - in part because it includes the incomes of several non-household organisations, such as universities, charities and trade unions. It has also questioned the way that the ONS calculates the impact of inflation on household incomes.

It predicts household incomes have risen very slightly - by £130 - from a low of £16,940 per head in late 2013, but still remain £600 - 3.3 per cent - below their pre-crisis peak.

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