Despite positive stories in the recent news regarding the economic recovery, new figures from the Office for National Statistics (ONS) highlight the o…
Despite positive stories in the recent news regarding the economic recovery, new figures from the Office for National Statistics (ONS) highlight the ongoing struggle for many to have their pay checks stretch to the end of the month.
Based on ONS wage data collected since October 2010, analysis carried out by the Citizens Advice Bureau (CAB) revealed rises in typical household wages have fallen behind levels of growth for consumer price index (CPI) inflation in recent years.
This means many people are now worse off financially than they were just a few years ago, despite the fact that the overall economic situation in the UK now appears to be improving.
Meeting essential living costs like rent, food and energy bills has become increasingly difficult for some in the wake of the rising CPI, with CAB's report showing a monthly difference between levels of inflation and wage increases of more than two per cent in several months over the last year and a half.
Compounded month over month, these small differences can soon add up, with regular pay in real terms shown to have fallen consistently from October 2010 to April this year.
Overall, wages excluding bonuses were shown to be down by £25 per week on average over this period.
Gillian Guy, chief executive of national charity Citizens Advice, commented: "People's wages aren't keeping up with rising prices. Falling unemployment will help some households to back on their feet, but there are still serious, ongoing problems in the labour market.
"Every day, CAB helps people who have been pushed over the edge by years of sustained falls in the value of their pay packets. It's vital that people are able to find secure, sustainable work which pays a consistent income and means that they can keep ahead of rises in the cost of essentials."
However, she added that recent years have also seen a rise in the number of self-employed workers across the UK and Ms Guy warned this trend could be masking an increase in the number of people in unstable, low-paid jobs.
Indeed, she argued that with greater entrepreneurialism across the country comes greater risk, stating that Citizens Advice has been just as likely to see self-employed individuals seeking advice on debt management as it has those who have been out of work.
Moreover, this group has also been shown to be more likely to seek advice on bankruptcy.
Individuals faced with mounting debts as a result of pay that has failed to keep up rising inflation over recent years should consider contacting a professional financial adviser, as they may be able to steer them in the right direction towards getting their finances back on track.
Those who feel there is no way back for their financial wellbeing should remember there are always options open to them, including the use of an individual voluntary agreement (IVA) with one's creditors, as well as (often the last resort) of being declared bankrupt.
Posted by Joe White