Sounds about right

Don't get me wrong, I'm not exactly feeling the pinch here or pleading poverty, I have no idea what real poverty is like after all having merely seen it when abroad travelling to do the odd bit of engineering work in the third world. Closest I have come to it would be doing the servicing of some warehouse cranes in Romania where I'd go out with the local crew and watch them nurse a drink all night whilst a round cost me little more than a couple of drinks here. The equivalent of £10 would get me absolutely wasted over there and I didn't mind buying the drinks, it was more or less covered by my company eating expenses which were the same no matter which country we were in.
Still, this article from the BBC does not surprise me.

BBC.

The average employee takes home £1,088 a year less than two years ago when the sum is adjusted for inflation, research commissioned by BBC Panorama suggests.

The sharp drop, in real terms, highlights the effect of stagnant wages and above-target inflation on incomes.

The average British worker earned £20,149 at the start of 2011 - a real terms fall of 5% from what they were earning in the middle of the recession.

The research was based on actual salaries paid into bank accounts.

It was carried out by the Centre for Economics and Business Studies and based on data on salaries from the payment processor, Vocalink, which looks after more than 90% of deposits into employees' bank accounts.

It was commissioned by Panorama to work out how much worse off employees have become since wages hit their peak.

People are indeed feeling the pinch, low percentage pay rises coupled with a higher rate of inflation coupled to an even higher cost of living means that peoples budgets no longer stretch as far as they once did. The still rising cost of fuel just keeps adding to everyones burdens as well as pushing the price of everything else up. 20% VAT hasn't helped either, though that's just pin money to the government.
What I expect to see is a return to a bit of self reliance, my Dad grew his own fruit and veg to supplement the family finances it helped a lot, other families did pretty much the same thing in the North East, getting an allotment was the equivalent of digging up gold so I'm wondering if there will be a return to such hobbies here. Certainly allotments are still very popular, but most gardens around here are still for relaxation, flowers and trees etc. So it strikes me that we're not quite into penury yet, but I do expect it to get worse before it gets better and I also plan to buy some decent gardening tools this year as well, self reliance is starting to become quite important to me, though I doubt I'll apply for an allotment, I'd be dead before I got one around here such is the waiting list. I'm also looking at a second hand wood burning stove plus a 3kw diesel generator. My good lady thinks I'm mad, but I'd rather be mad my way than the madness of ignoring the sign and partying till the last.