Young people in Britain saw their incomes fall almost twice as much as older people in the five years after the financial crisis, according to a report published by a leading think tank yesterday.

New research from the Institute for Fiscal Studies (IFS) showed median household income fell 13 per cent, taking inflation into account, for 22-30 year-olds between the 2007-08 and 2012-13 financial years, compared with 7 per cent for people aged between 31 and 59.

And while the employment rate was unchanged for the above-30 age group over the period, it fell by 4 percentage points for those in their 20s, according to the IFS, whose research is often cited in British political debate.

Living standards are a key issue ahead of next year’s general election in Britain. While the economy has grown much more quickly than expected over the last year, wage growth is only just starting to recover after lagging inflation almost constantly since the crisis.

“Pay, employment and incomes have all been hit hardest for those in their 20s.

A crucial question is whether this difficult start will do lasting damage to their employment and earnings prospects,” said Jonathan Cribb, research economist at the IFS.

Britain’s ruling Conservatives have promised to protect pensioners’ incomes if they win the 2015 election, and say they will ensure that workers reap the gains from the recovery. The opposition Labour party – narrowly ahead in the opinion polls – said in response to the IFS report that it would help young people by boosting apprenticeships and building more homes.