The squeeze on family finances is set to last another five years, with UK households to be £1,300 a year worse off in 2018 than they were in 2009, according to a report.
Rising costs, stagnating pay and austerity measures will continue to place pressure on disposable incomes, the report by the Centre for Economic and Business Research (CEBR) to mark five years of the Asda Income Tracker predicts.
It found that this year, the average UK household is £868 a year worse off, in real terms, than it was in 2009.
Furthermore, the level of household discretionary income is likely to stand at or below the current £160 a week mark until the last quarter of 2018, when it will begin to rise once more.
The report says "stubbornly slow" income growth and rising inflation will continue to be the main factors causing the squeeze on living, with price inflation on essential items expected to outstrip average pay growth until 2018.
Asda president and chief executive Andy Clarke said: "Looking ahead to the next five years, one thing is clear: it's going to remain incredibly tough for consumers.
"Over the next five years we need targeted support from both government and business to help those people who face the greatest squeeze on their incomes and living standards. I'd like to see better opportunities for the one million young people currently out of work and an increase in the income tax threshold to bring it into line with the salary of someone on the national minimum wage.
"This will benefit everyone, helping to stimulate spending and economic growth, particularly those on the lowest incomes whom we know will be the hardest hit over the next five years."
"When we launched the Income Tracker five years ago to better understand the spending power of households across the UK, we could not have foreseen what has financially been the hardest five years this generation has known."
CEBR executive chairman and founder, Doug McWilliams, said: "After a tumultuous five years for household finances, the UK economy is finally in recovery mode. However, my sense is that this is a business-led recovery and households are not benefitting as much as would normally be expected in an upswing
"Only by 2018 do we expect nominal discretionary incomes to start rising but by then on our forecasts spending power in cash terms will still be 1.4% lower than its 2009 peak."