Falling incomes will mean the biggest drop for middle-income families since the 1970s - and will push 600,000 more children into poverty, says a report from the Institute for Fiscal Studies.
The IFS forecasts two years "dominated by a large decline" in incomes.
By 2013 there will be 3.1 million children in poverty in the UK, according to the IFS projections.
Also, too, tax cuts.