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Employees feel the bite of the big pay freeze

Employees feel the bite of the big pay freeze

Category: Money

Updated: 03/08/2011
First Published: 03/08/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Just a quarter of workers in the UK have received a pay rise in 2011 so far, with many having to take a pay cut.

Figures from the Chartered Institute for Personnel and Development (CIPD) show that almost three in five (58%) employees have received a pay freeze since January earlier this year.

An unfortunate 6% have had to accept a cut in their salary, as many businesses have been forced to look at ways to slash costs while keeping redundancies to a minimum.

Just more than one in four (28%) employees have benefitted from a pay rise.

Not surprisingly, the public sector are being hit the hardest, with over three-quarters (77%) receiving a pay freeze, 4% a pay cut, and 13% a pay increase.

All council workers on less than £21K per annum were told last year that they faced a two year pay freeze as part of the Government's efforts to claw back some of the UK 's sizeable budget deficit.

By comparison, 52% of private sector workers have had a freeze in pay, with 7% having their wages cut.

However, 32% of private sector workers have been rewarded with a rise in pay, with those that work in manufacturing and finance the most likely to have been given good news.

The CIPD said that even those that have seen their wages grow are not likely to have seen much benefit because of the soaring cost of living.

"Even those who are lucky enough to get an increase in their pay will find it below the current cost of living, compounding consumer belt tightening," said Charles Cotton, CIPD performance and reward adviser.

"Inflation figures later this month will highlight growing pricing pressures, which is likely to continue for some time.

"We will see some increase in the number of private sector workers receiving a pay award in the second half of 2011, especially in the retail, catering and hotel sectors, as the increase to the national minimum wage comes into effect in October.

"However, given that the busiest time for pay awards in the private sector is between January and May, most of these workers who have not received a pay rise so far will now probably not get one at all."

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