Pay cut for millions of workers as real wages fall 2.4% – what it means for your money... - The Sun

Selasa, 14 Maret 2023

Pay cut for millions of workers as real wages fall 2.4% – what it means for your money... - The Sun

MILLIONS of workers are facing a cut to pay as inflation eats into household earnings, while the unemployment remains unchanged.

New figures released today by the Office for National Statistics (ONS) show that regular pay in real terms fell by 2.4%.

The rate of UK unemployment stayed at 3.7% - the same as in the previous three-month period, the ONS said.

The number of people neither working nor looking for a job fell overall, driven by a drop in young people.

But a record number of people were completely outside the labour market due to long-term sickness.

The data also revealed a 51,000 drop in the number of job vacancies to 1.2 million, while the redundancy rate edged higher.

The number of people reporting redundancy increased by 0.2 per thousand employees compared with the previous three-month period, to 3.3 per thousand employees.

It comes as the UK’s rate of inflation fell to 10.1% in January - the third month in a row that its fallen.

Despite inflation falling back from record highs, people’s incomes are still under pressure.

Not taking in to account inflation, regular pay increased 6.5% from November 2022 to January , a slight slowdown on the 6.7% growth the previous three months.

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But with the Consumer Prices Index (CPI) inflation taken into account, regular pay fell.

It means prices are rising at a faster rate than pay, which means people's incomes are squeezed.

It follows months of strikes in recent months over pay.

Many are calling for higher increases to keep up with the skyrocketing prices of everyday items.

The figures there were 220,000 days lost to strike action in January, down from 822,000 in December, with schools the hardest hit.

Darren Morgan, director of economic statistics at the Office for National Statistics, said: “Although the inflation rate has come down a little, it’s still outstripping earnings growth, meaning real pay continues to fall.”

“The number of working days lost to strikes fell in January from the very high level seen in December.

"Nevertheless, many days were still lost, with education the most affected sector.”

The Chancellor Jeremy Hunt said the jobs market "remains strong, but inflation remains too high".

He added: “To help people’s wages go further, we need to stick to our plan to halve inflation this year.

“Tomorrow at the Budget, I will set out how we will go further to bear down on inflation, reduce debt and grow the economy, including by helping more people back into work.”

It comes as the Chancellor is set to reveal the government's Spring Budget.

Jeremy Hunt is set to announce a major plan to drive millions of economically inactive Brits back to work.

The package of policies will focus on the long-term sick, those with short-term illnesses, early retirees and those on welfare.

A source said: “Those who can work, will. Those who can’t, we will always help.”

Alice Haine, personal finance analyst at Bestinvest, said: "With the UK’s labour market remaining tight, all eyes are now on the Budget and what Jeremy Hunt will do to address the UK’s many barriers to work - from an ageing population and early retirement to high childcare costs, soaring long-term sickness rates and a faltering health system."

As well as measures to tackle unemployment, there has also been confirmation of two major policy changes to help families with both their energy bills and childcare costs.

Energy firms will be barred from charging four million families who use prepayment meters more for their energy.

Plus, parents are set to be £480 a year better off as strict rules on staff-to-children ratios in nurseries are relaxed.

To help with the cost of living squeeze, the number of kids per staff in nurseries is expected to rise from four to five.

This in turn should see families save £40 a week - or £480 a year.

What it means for your money

The main concern when workers see a "real terms" fall in their salary, is that their pay is not keeping pace with the cost of living.

Wage growth is still way behind inflation as prices of everything from groceries to energy bills are going up at a much faster rate.

But a tight labour market could means it's a good time to find a new job or ask for a pay rise.

It is likely you'll still feel the pinch though as the cost of living crisis continues.

Energy prices, fuel and food are are among the essentials which have rocketed.

It means many are struggling to keep up, or have already fallen behind on bills.

What bill help is available?

A £900 payment will be going to millions on means-tested benefits and Universal Credit this year.

To be eligible for the payment, households will need to be claiming at least one of the following:

Income-based Jobseeker’s Allowance
Income-related Employment and Support Allowance
Income Support
Pension Credit
Tax Credits (Child Tax Credit and Working Tax Credit)
Housing Benefit
Council Tax Support
Social Fund (Sure Start Maternity Grant, Funeral Payment, Cold Weather Payment)
Universal Credit

Elderly Brits will receive another one-off £300 pensioner cost of living payment.

Those with certain disabilities will also qualify for a further £150 cost of living payment.

Energy suppliers also offer plenty of energy grants and schemes to help you out if you're struggling. Here's a list of schemes open right now:

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Selasa, 14 Maret 2023