By Daniel Hunter
The VocaLink Take Home Pay Index released today (Wednesday) shows pay growth has started 2013 at a much lower rate than that seen at the beginning of 2012, when year-on-year pay growth stood at 2.0%.
The data also shows that workers across all sectors have experienced an average, real terms pay packet decrease when comparing December 2012 to December 2011.
The VocaLink service sector take home pay is £30:00 per month lower in real terms, while the manufacturing sector pay is £61:00 per month lower. In the public sector, real take home pay is £35:00 per month lower.
This month’s VocaLink FTSE 350 Take Home Pay Index shows that annual growth in the private sector is up marginally, rising to 0.7% in the three months to the end of January compared to a previous reading of 0.4%.The VocaLink manufacturing Index recovered in the three months to the end of January with annual growth standing at 0.2%, up from annual growth of -0.8% in the three months to the end of December.
Both the VocaLink service sector and public sector take home pay Indices continue to show little signs of picking up. Annual growth of the VocaLink service sector Index edged up marginally in the three months to January, growing to 0.7%, compared to a previous reading of 0.6%. The VocaLink public sector Index remains low at 0.7% annual growth in the three months to January; pay growth in the public sector has stayed broadly at this level for the past nine months.
“This month’s VocaLink Take Home Pay Index shows workers continue to face pressure on their disposable income," David Yates, Chief Executive Officer at VocaLink, said.
"Marginal increases in take home pay growth are being more than offset by higher costs of living. For five consecutive months we have seen a significant gap between the VocaLink Take Home Pay Index and CPI. Consequently household finances could continue to be squeezed as inflationary pressures appear set to remain.”
Douglas McWilliams, Chief Executive of economics consultancy Cebr, said: “Today’s VocaLink Take Home Pay Index shows workers struggling against a backdrop of economic uncertainty. The economy remained broadly stagnant in 2012 and with only modest growth predicted for 2013, significant wage increases seem unlikely in the short term.
"Policy makers, however, will be pleased to note that unemployment in the UK continues to fall; in the three months to November unemployment levels stood at 7.7%, a marked improvement on the 8.4% level seen at the same time in 2011.”
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