Curbs on wages and high inflation means that the average British worker takes home £1,088 less in real terms than two years ago.
Research by the Centre for Economics and Business Studies found that an average worker earned £20,149 at the start of this year. This is a real terms fall of 5 percent from what they earned in 2009.
Some groups have been particularly hard hit. For instance, construction workers have seen their take home pay fall by £1,188 in the same time.
Research has also found that 659,000 households struggle to pay their mortgages while 117,000 are in arrears.