Middle income families suffer most in recession

The average disposable household income in the UK fell by £200 in 2011 according to figures published by the Office for National Statistics (ONS).  Middle income families have been hit hardest by the fall  with many seeing their disposable incomes down 4.3% from £25,500 to £24,400 last year.  

The statistics are yet more evidence of the increased pressure on families who have become known as the ‘squeezed middle’.  These families are working harder than ever to make ends meet, as wage increases remain static but the price of goods and services keeps increasing.

The report also showed that all income groups are paying a higher share of their income in indirect taxes, partly due to the rise in VAT from 15-20%.  Whilst the poorest 20% have seen the greatest increase in the percentage of their income paid in these taxes, their overall income was boosted by the amount received in cash benefits such as housing and income support.  

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