Staff '£1,000 worse off than 2009'
Workers are more than £1,000 worse off than they were two years ago as their pay has failed to keep pace with hikes in the cost of living, research has indicated.
The average employee has seen the value of their take-home pay dive by £1,088, or 5%, in real terms since the middle of the recession, according to BBC1's Panorama programme.
The study found that average annual salaries were £20,419 once tax had been deducted, but once the impact of inflation was factored in, the buying power of people's pay was actually lower now than in 2004.
Workers in the construction sector have been hit particularly hard, with the value of their take-home pay falling by £1,188 a year in real terms since 2009, while financial intermediaries are £1,212 worse off.
The programme found that the squeeze in people's living standards has been made worse by workers being too afraid of losing their job to ask for a pay rise.
David Blanchflower, a former member of the Bank of England's Monetary Policy Committee, told Panorama: "One of the bleak things going on right now is that people are very fearful of losing their jobs.
"They're worried about the austerity that's coming, and that's especially true of people in the public sector."
The programme said the phenomena of workers being too afraid to ask for a pay rise was most obvious in the construction sector, which has shed 10% of its workforce during the past year.
The research, carried out by the Centre for Economics and Business Research and the Institute of Social and Economic Research, also found an estimated 659,000 households are already struggling with their mortgage payments, while around 117,000 people are in arrears.
It is thought a further 36,000 households would struggle if interest rates were to rise by 1% to 1.5%, while 179,000 people would have trouble keeping up with repayments if rates returned to their pre-credit crunch level of 5%, plunging an additional 17,000 people into arrears.