77% of wages ‘failing to keep up with inflation’
Despite Consumer Prices Index recently hitting lowest level since 2009, a uSwitch reports shows that pay rises for three quarters of Brits are failing to keep up with inflation
Over three quarters of the population’s wages are not keeping up with inflation, according to a uSwitch report on the cost of living.
Despite the Consumer Prices Index (CPI) recently reaching its lowest level since 2009, the majority of people’s wages are failing to keep up with the cost of living.
This means that 77% of the population believe that any pay rise, if they do get one, will be below the CPI of 1.9%.
In fact, according to the research, less than half (45%) will be getting a pay rise at all this year – meaning that the average increase in pay will be just 1%.
Last year 46% of workers experienced a pay freeze, and this year the figure is expected to climb to 55%.
The study also found that 16% of workers have already seen their wages remain stagnant for more than two years.
Meanwhile, working hours are on the up – a quarter of consumers (25%) said that they had worked longer hours over the last year.
Rising inequality in pay
In the debate over rising inequality in the UK, the survey found that higher earners will be receiving the biggest pay rises in 2014.
Those in the top 10% who earn more than £45,000 a year will be getting an average pay rise of 2.4%, whereas for those in the bottom 10% who earn under £7,500, it will be just 0.5%.
There is also a considerable difference in the pay increases between the private and public sector.
Those in the private sector will receive an average increase of 1.3%, for the public sector it’s just 0.7%.
Despite the growing confidence in the UK economy, optimism amongst consumers isn’t keeping pace.
Over half (53%)have said that they’re worried about their financial situation[and 20% think that it will get worse this year.
Those living in the North East are the most likely to get one with 54% expecting a welcome boost to their pay cheque. Yorkshire and Humberside residents are close behind with 53%.
At the other end of the scale, just 32% of workers in Wales will see an increase to their salary this year and just 38% in the South West. For Londoners 50% believe they have a pay rise to look forward to in 2014.
A third would consider moving to a different part of the UK if they were to get paid more.
Unsurprisingly, the youth are the most mobile and willing to uproot for a bigger return on their working hours – almost half (46%) of the younger generation would relocate, while 21% of older workers would consider it.
Cost of living ‘tidal wave’
Ann Robinson, director of consumer policy at uSwitch, said: “It’s now clearer than ever that consumers are struggling to keep afloat in the tidal wave of increased living costs. Yet no lifeline is being thrown by their employer.
“In fact, things are looking even bleaker, with even more people facing a pay freeze this year than last.
“This reality is a far cry from the growing optimism that the UK economy is on the up – with over three quarters of consumer’s wages not keeping up with inflation.”