The bosses of the pensions and life insurance giant also warned that inequalities across the UK have worsened over the past year, with the poorest households being hit hardest by rampant inflation, UK Daily News reported.

The Office for National Statistics (ONS) said last week that inflation rose by surprise to 10.4% in February as rising food and drink prices kept pressure on household budgets.

New research from L&G has revealed the extent to which rising costs have taken a toll on household finances, with the impact particularly hard on the poorest in society.

The group’s latest Rebuilding Britain Index found that 95% of working households in the UK have seen their pay cut in real terms over the last 12 months.

Low-income households have been hit harder, with 99% of households earning less than £20,000 making a real cut.

Meanwhile, around 83% of those earning more than £100,000 did better in the past year.

The figures also showed that 47% of households are worried about not being able to keep up with rent and mortgage payments.

L&G Group Chief Executive Sir Nigel Wilson said, “Our research of 20,000 UK households shows the tough choices that inflation is forcing many people in the UK to make."

“Employment levels continue to improve, but real wages lag behind," he added.

“It is particularly worrying to see that not only are key RBI policies such as access to housing and healthcare stalling or declining across the country, but that pressures on the cost of living are widening the inequalities that the leveling-up agenda is aimed at,” he said.

It comes days after the Government said it would allocate more than £800million to further align and renew funding as part of the budget.

However, the report points out that the gap between London and the poorest parts of the UK has widened since previous research.

The report’s Jobs and Wealth score for London improved to 73 out of 100, while North East England (58), North West England (61) and Yorkshire & Humber (61) showed no improvement.

John Godfrey, Director of Levelling-up at L&G, said, “Legal & General has already invested billions and continues to invest in cities and towns across the UK including Newcastle, Sunderland, Leeds, Sheffield, Manchester, Birmingham, Oxford and Cardiff."

“This is part of our approach to inclusive capitalism – which takes a place-based approach to where and how we invest,” he added.