21st February 2014
Annual real wage growth for FTSE 350 employees has reached its highest level for 18 months, according to the latest VocaLink Take Home Pay Index.
FTSE 350 workers are now £8.27 better off than they were in January 2013. Employees in the services sector are £12.49 a month better off, however manufacturing sector workers are £21.87 worse off. Public sector workers continue to feel the pinch with £20.33 less to spend each month than they did last January.
The monthly index – from the company which processes the salary payments for more than 90% of the British workforce – does show however that purchasing power is still down considerably for all workers compared to six years ago.
FTSE 350 workers are still £126.40 – the equivalent of a family day out – a month worse off than they were in 2008. Manufacturing workers are down £170.48 each month while service sector workers have lost £121.32 each month. Public sector workers have seen their spending power squeezed by £116.85 each month compared to March 2008.
David Yates, chief executive officer at VocaLink, says: “Our Take Home Pay Index shows how this week’s fall in inflation has brought good news for many workers. FTSE 350 employees have, on average, enjoyed their biggest wage increases for 18 months. However, despite the positive news for many, some workers are continuing to see their salaries fall in real terms. Furthermore, our research shows that spending power is down for all employees in comparison to 2008.”
FTSE 350 wages increased 0.6% in the three months to January 2014, up from 0.3% in the three months to December 2013. Annual real take home pay in the public sector declined at a rate of 1.2% year-on-year in the three months to January 2014.
There were variations in the private sector. Annual real take home pay in the manufacturing sector remained negative in the period at -1.2%, despite inflation falling below 2% for the first time in four years. By contrast, annual real take home pay growth in the services sector increased at its fastest rate since March 2008, accelerating 0.9% in the three months to January 2014, up from 0.5% in the three months to December 2013.