Almost two thirds of people (65%) have suffered a pay freeze in recent years – 15% have seen their pay frozen for at least 3 years
Â· Only 3 in 10 workers (30%) are expecting a pay rise in 2012 but the average increase will be just 2.1% – just half the current rate of inflation. Any expected increases won’t even meet the rate of inflation for 80% of those lucky enough to get a pay rise
Â· Over half (54%) of those expecting a pay freeze will have to severely rein in their spending to cope, while two in ten will look to increase their hours or take a second job – a worrying 15% have no idea how they’ll cope.
Â· Cash-strapped consumers are also facing a 5.9% hike in rail fares, and the impact of last year’s 21% increase in energy bills. Further pay freezes won’t help the half of Brits (50%) who already feel less financially well off than before.
As the cost of living continues to rise, pay freezes are leaving many Brits with a bleak outlook, according to new research from uSwitch.com, the independent price comparison and switching service, which reveals that less than three in ten workers are expecting a pay rise this year. To make matters worse, 65% have suffered recent pay freezes – 15% haven’t seen a pay rise for at least three years.
But even for the lucky few expecting a pay rise, there is likely to be little to celebrate. The average expected pay increase is just 2.1% – under half the rate of inflation. For 80% of those expecting to get a pay rise, the increase won’t even keep up with inflation which is nearly at a record breaking 5%. Only 3.3% of Brits are expecting a pay rise of more than this.
To make matters worse, cash-strapped consumers have seen rail fares increase by up to 11%, meaning any workers lucky enough to get a pay rise may see it swallowed up by the cost of travelling to work. And with energy bills having rocketed by 21% in the last year, it’s not surprising that three quarters of people (76%) are worried about the rising cost of living. Pay freezes will be a major concern for the quarter of consumers (23%) who are already worried about their current level of debt.
For those not expecting a pay rise, 2012 will be a tough year. Over half (54%) will have to severely rein in spending to cope with a pay freeze, while two in ten will have no choice but to take a second job or increase their current working hours. Worryingly, 15% of consumers have no idea how they’ll cope this year without a pay rise.
Michael Ossei, personal finance expert at uSwitch.com, says: “After a difficult 2011 which saw the cost of living rocket, savings rates stuck at rock bottom and pay frozen, Brits are preparing themselves for another tough year. While the cost of living continues to rise, pay isn’t keeping up, which means that workers are seeing their disposable income drain away. Further pay freezes in 2012 could push many consumers over the edge.
“In the face of another tough year, those who plan to severely rein in their spending have hit the nail on the head – this year more than ever people will have to watch their spending and cut back where they can. Consumers can give themselves a pay rise by shopping around for the best deals on their household bills – which could save you over Ã‚Â£1,800.”