By Daniel Hunter
Average annual salaries in the last 12 months are £487 less in real terms than in the previous 12 months, according to the latest data from the VocaLink Take Home Pay Index.
The index uses actual pay data to chart the average wages of public and private sector workers. The data is adjusted for CPI inflation and is therefore a gauge of how household spending power has changed over time.
Real private sector monthly take home pay has fallen continually each month between January 2011 and January 2012, taking average annual take home pay for private sector workers down to £17,698 for the 12 months ending January 2012, according to the VocaLink FTSE 350 Take Home Pay Index. This is a significant decrease from the previous 12 months that saw average annual real take home pay at £18,142.
The manufacturing and public sectors are the worse affected with both seeing a reduction in annual salaries of over £530 each, according to their specific Indices.
“The VocaLink Take Home Pay Index looks at salary after tax and is therefore the best indicator of what people truly have to spend each month," David Yates, chief executive officer at VocaLink, comments:
"Looking at the latest statistics we can see that there is still enormous pressure on salaries which means that pay across all sectors is struggling to grow. When this sluggish growth is combined with the inflation figures seen in the last year, annual salaries in real terms are negatively impacted.
“The Index shows that actual spending power is experiencing a month-on-month decline and therefore the budget announcements come at a critical time for UK households.”
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