Public sector workers are worse off now than at anytime during recession

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  • Real take home pay growth in the FTSE 350 remained static at 0.3% in the three months to end of December 2013 – the same growth figure as the three months to the end of November 2013
  • Services sector real take home pay growth slowed slightly in the three months to the end of December 2013 – down to 0.5% from 0.6% in the three months to the end of November 2013
  • The rate of decline in annual real take home pay in the manufacturing sector slowed to -1.1% in the three months to December 2013 – up from -1.6% in the three months to the end of November 2013
  • The rate of decline in public sector real take home pay growth rate slowed to -1.4% in the three months to the end of December 2013 – up from -1.8% in the three months to the end of November 2013 – the slowest decline since March 2012

Workers in Britain’s public sector are £23 per month worse off in real terms compared to December 2012 and £127 when looking at December 2009 figures. It comes as the monthly index – from VocaLink, the company that processes the salary payments for more than 90% of the British workforce – reveals a marginal dip in strong pay growth for service sector workers.

Real term take home pay for public sector workers saw the rate of decline slow year on year in the three months to the end of December 2013 at -1.4% compared to -2.0% in the same period the previous year, resulting in a below inflation wage increase. In comparison, annual real wage growth in the services sector rose to 0.5% in the three months to the end of December 2013, up from -1.9% in the same period the previous year (a real term increase of £7 year on year).

Meanwhile, the annual decline in real take home pay growth in the manufacturing sector slowed to -1.1% in the three months to the end of December 2013, in contrast to -3.3% in the same period a year earlier. FTSE 350 company workers saw real wage growth of 0.3% year on year, reversing negative growth of -2.1% in the same period 12 months earlier.

David Yates, Chief Executive Officer at VocaLink, said: “Many are optimistic about growth prospects for the UK economy for 2014, however the latest VocaLink Take Home Pay Index reveals that this prosperity is yet to filter through to all workers’ monthly wages. In fact, when taking into account inflation, thousands are worse off in comparison to salaries 12 months ago. The experiences of those in the public sector come in stark contrast to above inflation wages increases in the services sector.”

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