Household incomes in Northern Ireland have dropped by £864, according to a new study.

Northern Ireland has experienced the biggest squeeze on living standards since the downturn of all regions and nations in the UK, independent think-tank the Resolution Foundation has revealed.

Typical incomes fell by 6.7 per cent between 2007-08 and 2011-12.

Northern Ireland’s position is due to its poor jobs performance – its employment rate is still 2 per cent below its pre-downturn level – and the fact that it has experienced by far the biggest pay squeeze in the UK, with typical wages falling by 13.4 per cent. This means that it has fallen behind the North East and has the lowest median household income in the UK, followed by Wales.

Matthew Whittaker, Chief Economist at the Resolution Foundation, said: "The fall and rise of living standards since the crash is a key election debate. But the experience has been felt very differently across different generations and parts of the UK.

"The UK entered the downturn with a sharp North-South divide, with typical household incomes in the South East almost a third higher than in the North East. Contrasting employment performances in the subsequent period has helped reduce that gap, but the mixed performance of other regions means that it would be wrong to conclude that the North-South divide is closing. The picture has become more complicated.

"The strong recent performance of the North East contrasts with much weaker recoveries in other low-income areas such as Northern Ireland and the West Midlands. Meanwhile the weak employment record of the South East looks very different to London.

"To add to the confusion, the stark generational divide means that many working age households in the North East will have experienced a tighter squeeze in living standards than pensioner households in Northern Ireland.

"The big variation in experiences between households means that voters will hear confusing messages on living standards that they may struggle to relate to."

(CD)