Public sector pay falls as private incomes rise

17 Apr 14
Take-home pay in the public sector has fallen in real terms over the last year, an analysis published today has found, despite official figures showing that wages across the economy are catching up with inflation

By Richard Johnstone | 17 April 2014 

Take-home pay in the public sector has fallen in real terms over the last year, an analysis published today has found, despite official figures showing that wages across the economy are catching up with inflation.

Payslips Photo: iStock

Payment firm VocaLink’s Take-home Pay Index, which measures changes in the real value of wages across a number of sectors, found monthly wages for public sector staff in the three months to the end of March were £15.39 lower in real terms than the same period in 2013. In addition, pay was £127.31 lower than the same period in 2008, before the coalition government introduced public sector pay restraint, including a two-year freeze and subsequent 1% caps on rises.

According to figures published by the Office for National Statistics yesterday, average weekly earnings rose by 1.7% in the year to February, matching the Consumer Prices Index level of inflation for the same month. This was the first time total wage growth had matched inflation in six years – although when bonuses are removed from the calculations, the annual increase in wages was only 1.4%.

VocaLink, which uses bank transaction data to measure wages, said real pay remained below the level before the financial crisis for private and public sector employees.

Workers for the 350 biggest companies listed on the London Stock Exchange had monthly take-home pay that was £21.73 higher in the quarter to March than in the same three months in 2013. However, they were still £113.38 per month worse off when compared to the same period in 2008.  


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