Britain faces a lost decade for living standards due to the financial crisis, which has created a lasting legacy of slow growth and government austerity, the non-partisan Institute for Fiscal Studies said on Wednesday.

The average household will suffer a 7.4 percent fall in real net income over the three years to April 2013 -- in line with a similar drop seen in the mid 1970s, but otherwise unmatched since records began after World War Two.

The recovery from this slump is likely to be even slower than in the 1970s, and by the time of the next national elections in May 2015, households' real net income will still be below that seen 13 years earlier in 2002, the IFS said.

We are living through the worst period for changes in measures of average living standards since consistent records began in the mid 50s and early 60s, said IFS researcher Robert Joyce.

The IFS based its estimate on new forecasts for growth and public spending published by the government's Office for Budget Responsibility on Tuesday after Chancellor George Osborne's autumn budget statement.

The OBR had already offered a bleak message on households' disposable income, but the IFS extended the analysis to look at the median household, rather than an aggregate measure which included very rich and very poor homes.

The IFS said poorer households were bearing the brunt of the government's fiscal austerity measures, which aim to largely eliminate a budget deficit of nearly 10 percent of GDP over the next five years.

Changes to the tax and benefits system announced on Wednesday -- such as the scrapping of a planned rise in petrol tax, and a freezing of child tax credits for poorer families -- further increased the burden of fiscal austerity for the poor and eased it for the richest households, IFS research showed.

The OBR's lower UK growth have forced Osborne to pencil in an extra 15 billion pounds in public spending cuts by 2016-17.

Until now we had been thinking of four years of cuts as unprecedented in modern times. Six years looks even more extraordinary, said IFS director Paul Johnson. We are running out of superlatives to describe just how extraordinary are some of these changes, he added.

Details of cuts to take place from 2015 onwards remain unclear, pending a new government spending review, Johnson said.

Mr Osborne will wait before clarifying his position. One presumes that he is keeping his fingers crossed that something will turn up which will make such deep cuts unnecessary. He has ended up in exactly the place he wanted to avoid -- promising further spending cuts in the period after the next election.

Figures from the OBR show the British economy is forecast to grow by only 0.7 percent next year, way below a March budget forecast of 2.5 percent.

Growth was expected to recover to 2.1 percent in 2013, down from a previous forecast of 2.9 percent, before accelerating to 3.0 percent by 2015 -- a rate which some analysts worry is too optimistic.

(Additional reporting by Susan Fenton; editing by Ron Askew)