Average household incomes have reverted back to pre-crisis levels with more than 2% below their 2009-10 peak, says the Institute for Fiscal Studies.
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The think tank discovered that the incomes of working age people remain below their 2007-2008 level, following their adjustment from inflation.
The over 60s will have a greater income than in 2007-2008 because pensions have been protected from any benefit cuts.
The IFS say that living standards have risen more slowly than in previous recessions.
The cause of this is primarily due to the slow growth in earnings for those who work. However, tax increases and benefit cuts in a bid to reduce the deficit have had a negative impact on the average income per household.
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"It's astonishing actually that seven years later incomes are still no higher than they were pre-recession and indeed for working-age households they're still a bit below where they were pre-recession," IFS director Paul Johnson told the BBC.
Those in the retirement bracket have come out much better off than those in the younger working age groups.
The IFS findings are based on numbers form the Labour Force and Survey and the Office for National Statistics to measure unemployment.
Median household income this year and last is equal to 2007-2008, however still less than in 2009 peak.
Between 2011 and 2015- the household income grew by just 1.8% and for those aged between 22 and 30- it's 7.6% lower. For those aged between 31-59, its 2.5% lower and the over 60s have seen a 1.8% uplift.
The IFS found that people believe the recession to have permanently affected their income prospects with lower consumptions of food and fuel at the same stage in other recessions.
"The key reason living standards have recovered so slowly has been weak earnings growth. In the long run, policies that boost productivity, and so increase real earnings, are likely to have a bigger impact on living standards than changes in tax and benefit rates," Robert Joyce, an IFS senior research economist, added.
Chancellor George Osborne told Radio 4 that the IFS' findings marked "a major milestone in our recovery".
"But it's not the end of the journey. This has been a difficult recovery because we've had such a deep recession," he added.
But Cathy Jamieson, Labour's shadow financial secretary said the IFS' report "confirms that working people are worse off since 2010".
"We need a recovery that reaches kitchen tables across Britain, not one which has left working people worse off," she added.
Source: BBC News