The Department of Work and Pensions said real income dipped by 3 percent for the second consecutive year, The Guardian reported. In its annual report, the department said real income in 2011-2012 was just below that in 2001-2002 and considerably below real income in 2009-2010, the year before the Conservative-Liberal Democrat coalition took power.
Median household income in 2011-2012 was 427 pounds ($670) a week.
For those in their 20s, the drop in real income between 2007-2008 and 2011-2012 was about 12 percent. The report said the number of children living in poverty increased by 300,000 with about 200,000 of them in households with two incomes.
Incomes dropped across the economic spectrum so inequality has not increased, the department said. But the age difference was stark with people in their 60s and 70s enjoying higher real incomes.
"The truth is that for a growing number of families, work isn't working," Alison Garnham, executive director of Child Poverty Action Group, said. "The promise that work would be a route out of poverty has not been kept as wages stagnate and spending cuts have hurt low-income working families."