Frances O'Grady said that not everyone had an inheritance to live off as she called for workers to get a catch-up pay rise to make up for years of recession.
Ms O'Grady said that employees should get back the money they had lost through pay freezes and other measures since 2008.
Ahead of the TUC annual congress which opens in Liverpool this weekend, she also warned of a "generational" pay gap, with too many young people stuck on low wages.
Pay rises will be the main concerns of the conference, just eight months before the next General Election.
On Tuesday the congress is due to hear from Bank of England Governor Mark Carney, whose wife was criticised for reportedly complaining that it was difficult to find somewhere to live in London for almost £5,000 a week,
Ms O'Grady said: "People have got to be able to keep up with the cost of living, but of course we want to see people getting back what they've lost over this period.
"The idea that people can keep taking cuts in their real standard of living, keep dipping into ever shrinking savings and getting into debt again .. is just fantasy."
But she accused the political class of failing to see this.
"I really think some politicians need to get real and understand most of us don't have an inheritance to rely on," she said.
"Most people have very few savings. Most of us are not living the high life but we do want to live a decent life and bring up a family. With the price of transport, childcare, food bills, it's getting tougher."
"I've always said I think there's a touch of the Marie Antoinette sometimes.
"It does seem to me to be a failure of imagination to think that ordinary working people can keep taking pay cuts year after year - and that that is not going to have an impact not just on household budgets but on the communities we live in."