The Office for National Statistics has revealed that the middle fifth of households saw their disposable incomes reduce by £1,100 to £24,400 in year to April 2012.
With the Chancellors austerity measures being put in place, the poorest members of society have been hit the hardest.
The indirect taxes such as VAT on alcohol, tabacco and fuel rose from 28p to 31p which hit the poorest fifth chunk of average disposable incomes.
The overall household group hit the hardest though VAT increases from 15pc to 20pc was the poorest.
This is an interesting population group as households are mostly hit by indirect taxes depending on the goods and services they use a large amount of.