Real wages have dropped by 1.2% as regular pay growth fails to keep up with soaring inflation, according to the latest official figures.
The Office for National Statistics (ONS) reported that the fall in regular pay, which excludes bonus payments, intensified when the effects of inflation were included in the three months to March compared to the same period last year.
Growth in total pay remained positive at 1.4%, the report said, due to the effects on bonuses.
However, the squeeze on households is likely to worsen as the Bank of England predicts that inflation will reach 10% this year after hitting a new 30-year-high of 7% in March.
Figures due out on Wednesday are expected, by economists, to show the consumer prices index (CPI) measure exceeding 9% in April – largely a consequence of the 54% leap in the energy price cap.
The Office for Budget Responsibility previously warned that households will experience the biggest fall in real incomes since records began in 1956, forecasting a drop of more than 2.2% this year.
The ONS data comes as Chancellor Rishi Sunak faces increasing pressure to do more to help families struggling with the cost of living.
Frances O’Grady, head of the Trades Union Congress, told Sophy Ridge on Sunday that Mr Sunak has “woefully failed” working people and called for a windfall tax to be imposed on the profits of oil and gas companies.