Employees lose 5% of take-home pay, research shows

UK workers are worse off financially, in real terms, than they were in the middle of the recession, a new study has revealed.

Work commissioned by the BBC's Panorama programme discovered that the average employee in Britain now takes home £1,088 less per year than they did two years ago, once inflation is taken into account.

The research was conducted by the Centre for Economics and Business Studies and shows the real effect that company pay freezes or below-inflation rises are having on workers in the UK. Allowing for inflation, the average amount of money that is paid into employees' bank accounts is lower now than in 2004.

The loss of income is certainly being felt by families trying to manage a shopping budget. Increases in the price of fruit and vegetables have meant that many families on tight budgets and people under the age of 25 have cut back.

The prices of items such as grapes and pineapples have shot up, although there is also some good news as the cost of bananas and apples has fallen.