WORKING-AGE families have lost an astonishing £20,000 in annual earnings over the past 20 years, a study has found.

In a report marking its 20th anniversary today, the Resolution Foundation found that the average earnings of a working-age family rose by just 7 per cent between 2005 and 2025.

This falls to 4 per cent for those in rented accommodation.

Pensioners and home-occupiers avoided the “dramatic collapse” of average incomes over the period, which rose by 21 and 14 per cent respectively, the think tank said.

Resolution Foundation founder Clive Cowdery said that “the existence of a permanently precarious group of working people, forever denied the rising prosperity that others enjoyed, has got worse, not better. 

“This makes our economy weaker, and our society and politics less stable. Resolving this lies at the heart of our renewed mission over the decades to come.”

The think tank report said that average working-age family incomes rose by 35 per cent between 1995 to 2005.

Had this continued, the typical family income today would be £51,000, rather than its actual level of £31,000 — a loss of £20,000.

It comes after food inflation rose for the fifth month in a row in August, with costs now rising at the fastest pace since the beginning of last year.

Surging beef, butter, milk and chocolate prices drove the 5.1 per cent year-on-year rise, official figures showed yesterday.

The Bank of England’s rate-setting committee will set new interest rates today.

TUC general secretary Paul Nowak said that “global challenges” were behind the rising food costs, and water and energy bill hikes driving overall inflation.

“Keeping interest rates high will not bring down these prices — but instead rates are adding to the pain for families and businesses,” he said.

“The Bank of England should cut interest rates tomorrow to ease pressures on households and businesses. This will help to boost growth and make life more affordable for everyone.”

Unite general secretary Sharon Graham said: “The government needs to face up to reality, stop the profiteering and get more money into the pockets of everyday people.”

Cheaper air fares kept the overall rate of CPI inflation at 3.8 per cent — the same as July — while RPI inflation fell from 4.8 to 4.6 per cent.