17th April 2014
The fall in inflation to 1.6% has helped drive up real year-on-year wage growth for private sector workers but pay packets still remain below pre-crisis levels writes Philip Scott.
While real take home pay growth has returned for private sector workers some caution is required as real wages remain much lower than at the start of 2008 according to global payments group VocaLink.
The group found that real pay remains below pre-financial crisis wage levels for private and public sector employees.
FTSE 350 workers were on average, 1.4% or £21.73 per month better off in the three months to the end of March 2014 compared to the same period in 2013.
They were however, £113.38 – roughly equivalent to an average household’s weekly expenditure on food and transport – per month worse off when compared to the same period in 2008.
According to the data, employees in the manufacturing and services sectors were £31.72 and £21.17 (or 1.7% and 1.4%) respectively better off in real terms compared to a year ago. But again when considered against the same period in 2008 they were £58.06 and £119.14 respectively worse off.
Meanwhile, public sector workers have seen their wages fall in the three months to the end of March 2014 both in comparison to the same period a year ago and that in 2008. Government employees were £15.39 and £127.31 respectively worse off.
David Yates, chief executive officer at VocaLink, said: “Our latest Take Home Pay Index shows real year-on-year wage growth across the private sector. Having said that, the latest VocaLink data shows there is a lot of catching up to do after years of weak income growth. Real pay remains down on early 2008 levels in both the private and public sectors.”