Britain's leading experts on tax and spending have said that living standards would be lower at the end of the current parliament than at the start, as they backed claims by the shadow chancellor, Ed Balls, that family budgets were being squeezed hard under the coalition.

Delivering its judgment on George Osborne's autumn statement, the Institute for Fiscal Studies took issue with the way Labour had calculated its estimate of a £1,600 loss to the average family in the three years since the coalition came to power in 2010 but said it was "pretty consistent" with survey data showing a big drop in household incomes between 2009-10 and 2011-12.

Paul Johnson, the IFS's director, said there was a lack of reliable figures for the current year, but added: "We do know from household surveys that income fell sharply in 2010 and 2011. It is almost certainly significantly lower now than it was in 2010.

"And while it should start to grow, it will surely still be below its 2010 level by the time we get to the election in 2015."

Osborne sought to counter Labour's claims this week by using a different way of calculating incomes to show total household incomes rose by 3.9% between their pre-recession peak of early 2008 and the second quarter of 2013.

Johnson said the yardstick for household incomes used by the chancellor was not normally used to measure living standards, and an IFS study found that it had failed to detect a squeeze on real spending power in any of the four big recessions Britain has experienced since the early 1970s.

"As a series it [Osborne's measure] behaves quite differently both since 2008 and over long periods of time to other series measuring living standards," Johnson said.

"It includes some income which does not accrue to the household sector at all. And its actual construction is opaque. It tells us something about household incomes but it should certainly not be used in isolation to measure how they are changing."

The IFS said Osborne's adoption of that National Accounts measure of household disposable income meant "non-profit institutions serving households", such as universities, were included alongside areas like pension savings, which have declined, freeing up more disposable income.

The Balls measure, it added, did not include changes to tax and benefits and used the retail prices index – no longer considered a reliable gauge of inflation by the Office for National Statistics – to come up with the statement that real wages had fallen by £1,600.

"That said a £1,600 fall is a fall of about 6%. That is pretty consistent with what we know from survey data happened to household incomes between 2009-10 and 2011-12," said Johnson.

The IFS director said it was not surprising that household incomes were lower than before the recession and had fallen since 2010.

"We have just lived through the deepest recession in generations and measured output is still below its pre-crisis level. And earnings have been hit particularly hard. In part that is the flipside of the strong employment numbers and is directly related to the apparent fall in productivity."

The IFS was critical of the chancellor's spending promises, including the freeze on fuel duty, introduction of marriage allowances, national insurance cut and freeze in business rates, costing £2.5bn, without concrete plans to fund them.

Of the plan to expand university student numbers by selling the student loan book, Johnson said: "This may work in the near-term fiscal numbers, but economically it makes little sense. Selling the loan book will be broadly fiscally neutral in the long run, bringing in more money now at the expense of less money later on. Lifting the cap on numbers will cost money every year."

More broadly, he said, this tactic was a theme of the autumn statement. "Continuing to announce tax cuts and to make new spending commitments, unfunded beyond 2015-16, can only increase the difficulty of reaching the fiscal balance he is targeting."

The IFS said the chancellor's plan to balance the budget by 2018-19 involved an acceleration in the pace of spending cuts from 2.3% a year in the five years from March 2011 to March 2016 to 3.7% a year in the three years after that.

The thinktank agreed with the independent Office for Budget Responsibility that this would involve shrinking the state to a level not seen since at least 1948. The IFS said this would hold true even if debt interest payments and infrastructure spending were added to the running costs of Whitehall departments.

To avoid a stepping up of the pace of spending cuts in the next parliament would require welfare cuts or tax increases worth £12bn, the IFS said.

TUC general secretary, Frances O'Grady, said: "Today's IFS analysis confirms that spending cuts will go on and on as George Osborne makes austerity permanent.

"This has nothing to do with economics, but is all about a rightwing political project.

"The chancellor is using the fallout from the global recession to permanently cut services and shrink the state back to where it was in 1948.

"This is not what voters want. They may have accepted the need for harsh medicine in the wake of the crash, but they want a cure that delivers rising living standards, decent services and a fair economy."

Chris Leslie, shadow chief secretary to the Treasury, said: "It's an embarrassing blow to the chancellor that his favoured measure of living standards turns out to include the incomes of charities and universities. The IFS is also right to question whether George Osborne's sums for future years really do stack up."