Public sector pay still declining in real terms over 12 months

24th June 2014

Annual real pay growth is continuing to grow for employees of FTSE 350 companies rising by £13.22 a month or 0.9% compared with 12 months ago according to the latest VocaLink Take Home Pay Index.

The data, which takes into account the fall in inflation to 1.5%, shows that for the three months to May 2014 those workers were £13.22 per month better off compared to the same period a year ago, while those in manufacturing and services sub sectors were £21.42 and £12.90 respectively better off.

While real pay growth for FTSE 350 workers remains in positive territory, the latest Take Home Pay Index shows that it has slowed. In the three months to the end of May, annual wage growth for employees stood at 0.9%, slightly down on the 1.1% seen for the three months to April.

Meanwhile, in the public sector, real take home pay for the three months to May 2014 was 1.1% lower than the same period a year ago. Workers took home an average of £1,566.30 per month, according to the latest data, down £17.98 from the same period a year ago.

In the manufacturing sub-index, real take home pay was 1.2% higher than a year ago. In the services sub-index, real take home pay was 0.9% higher than a year ago while in the public sector index real take home pay was 1.1% lower than a year ago

David Yates, Chief Executive Officer at VocaLink, said: “Real pay is continuing to grow for FTSE 350 employees, according to our latest Take Home Pay Index. However despite the ongoing progress for wages, real take home pay growth is slowing on the back of a fall in inflation to 1.5%. Meanwhile, public sector workers continue to see their take home pay declining in real terms compared with a year ago.”

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