The primary reason for the falls in average income in 2010-11 was the fall in earnings. Pre-tax earnings fell by in real terms in 2010-11, mostly due to the falls in the real earnings of those employed as opposed to a fall in the numbers employed. From 2008-10 real average incomes still grew, based on a relatively stable real employment income and strong real-terms growth in income from state benefits and tax credits. In 2010-11 medium incomes before taxes and benefits was lower than its 2007-08 peak. The IFS asserts that there are good reasons to be pessimistic.
