Pay cut for millions of workers as real wages falls 2.4% – what it means for your money

MILLIONS of workers are facing a cut to pay as inflation eats into household earnings, while the unemployment remains unchanged.

New figures released today by the Office for National Statistics (ONS) show that regular pay in real terms fell by 2.4%.

The rate of UK unemployment stayed at 3.7% – the same as in the previous three-month period, the ONS said.

The number of people neither working nor looking for a job fell overall, driven by a drop in young people.

But a record number of people were completely outside the labour market due to long-term sickness.

It comes as the UK’s rate of inflation fell to 10.1% in January – the third month in a row that its fallen.

Prices are rising at a faster rate than pay, which means people’s incomes are squeezed.

Growth in average total pay (including bonuses) was 5.7%.

It comes as thousands of workers have gone on strike in recent months over pay.

Many are calling for higher increases to keep up with the skyrocketing prices of everyday items.

Darren Morgan, director of economic statistics at the Office for National Statistics, said: “Although the inflation rate has come down a little, it’s still outstripping earnings growth, meaning real pay continues to fall.”

“The number of working days lost to strikes fell in January from the very high level seen in December.

“Nevertheless, many days were still lost, with education the most affected sector.”

What it means for your money

The main concern when workers see a “real terms” fall in their salary, is that their pay is not keeping pace with the cost of living.

Wage growth is still way behind inflation as prices of everything from groceries to energy bills are going up at a much faster rate.

But a tight labour market could means it’s a good time to find a new job or ask for a pay rise.

It is likely you’ll still feel the pinch though as the cost of living crisis continues.

Energy prices, fuel and food are are among the essentials which have rocketed.

It means many are struggling to keep up, or have already fallen behind on bills.

What bill help is available?

A £900 payment will be going to millions on means-tested benefits and Universal Credit this year.

To be eligible for the payment, households will need to be claiming at least one of the following:

• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Income Support
• Pension Credit
• Tax Credits (Child Tax Credit and Working Tax Credit)
• Housing Benefit
• Council Tax Support
• Social Fund (Sure Start Maternity Grant, Funeral Payment, Cold Weather Payment)
• Universal Credit

Elderly Brits will receive another one-off £300 pensioner cost of living payment.

Those with certain disabilities will also qualify for a further £150 cost of living payment.

Energy suppliers also offer plenty of energy grants and schemes to help you out if you’re struggling. Here’s a list of schemes open right now:

• British Gas Energy Trust Individuals and Family Fund
• British Gas Energy Trust
• EDF Customer Support Fund
• E.ON and E.ON Next Grants
• Octopus Energy Assist Fund
• OVO Energy
• Scottish Power Hardship Fund

There’s also a one-off fuel voucher from your energy supplier if you’re on a prepayment meter.