Skip to main content

Take-home Pay Growth 'Stagnating'

The benefits of getting the best careers advice have been highlighted by a study which showed a drop in the annual rate of increase in take-home pay.

The benefits of getting the best careers advice have been highlighted by a study which showed a drop in the annual rate of increase in take-home pay.

Average annual growth dropped to 1.4% in January from 1.9% during the previous month, according to specialist services provider VocaLink.

The biggest reductions were in the manufacturing sector, while services firms, despite seeing the highest increases, suffered a fall from 1.7% in December to 1.6% last month.

Wage growth may be starting to "stagnate" because of the slower-than-expected recovery from the financial crisis, the study added.

VocaLink chief executive Marion King said: "Although we are now technically out of the recession in the UK with the last official GDP estimate, pay growth rates are not going to return to those pre-recession levels for quite some time.

"Stagnating salaries combined with the restoration of the 17.5% Vat rate are going to have a real impact on households' spending power."

Douglas McWilliams, chief executive of economics consultancy cebr, predicted that the labour market would continue to remain sluggish for "quite some time".

He added: "Following the VAT cut reversal, we expect a period of rising inflation without a corresponding increase in pay growth which will further limit disposable income for the foreseeable future."

the grb team grb author

Graduate Recruitment Bureau (GRB) is the UK's highest review-rated graduate recruitment consultancy. Every day our teams of sector-specific experts get contacted by major graduate recruiters, SMEs and start-ups who are looking for high calibre university students and graduates.

Latest Blog Posts

Embarking on the journey to secure a graduate job in operations after university can be both exciting and daunting. Operations roles form the backbone of any organisation, ensuring that everything...

Read more

Thinking about a career in physics teaching? Discover how an IOP Physics Teacher Training Scholarship provides £31,000 funding, mentorship, and professional development to help you succeed in the...

Read more

Teaching is an incredibly rewarding and progressive graduate career path to pursue after university. But what does the journey to becoming a teacher involve? What qualifications and skills are needed?...

Read more