Millions of workers face ‘PAY CUT’ as wage growth is squeezed
MILLIONS of workers are feeling the pinch as prices are rising at a faster rate than pay.
New figures released today show that wages in "real terms" fell by nearly 3%, meaning less money in people's pockets.
Statistics from the Office for National Statistics (ONS) reveal total pay not including bonuses grew by 4.3% in the three months to May.
But when taking into account inflation, pay FELL by 2.8% - a record drop.
That's because inflation has reached 9.1% with essentials like fuel and food among the costs rising.
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When inflation is rising at a faster rate than wages, it means that your money doesn't stretch as far.
In good news, the number of job vacancies rose between April and June to 1,294,000.
Employment stood at 75.9% for those aged between 16 to 64 and unemployment for the same age category was 3.8%.
David Freeman, ONS head of labour market and household statistics, said the figures showed a "mixed picture" for the labour market and offered a stark message on people's pay.
He said: "The number of people in employment remains below pre-pandemic levels and, while the number of people neither working nor looking for a job is now falling, it remains well up on where it was before Covid-19 struck."
He added: "Following recent increases in inflation, pay is now clearly falling in real terms both including and excluding bonuses.
"Excluding bonuses, real pay is now dropping faster than at any time since records began in 2001."
Adrian Lowery, financial analyst at investing and coaching platform Bestinvest, added: "While such high levels of inflation will be temporary, those price rises will not reverse, so if pay increases do not keep pace, then in the medium term a standard of living hit will be felt."
"If there is any consolation however, then it is that the labour market looks robust with employment continuing to rise and employers making jobs available."
Inflation hit a 40-year high of 9.1% in April, and struggling households have been told worse is still to come.
The Bank of England has warned the figure could reach 11% this year.
Inflation is a measure of how the price of goods and services have changed over the past year.
So the higher the figure, the more you'll pay for your food and fuel.
There are also fears the UK economy could be heading for recession, despite Gross Domestic Product (GDP) going up by 0.5% in May.
The ONS data also revealed the number of working women is now two million more than in 2010.
Julie Marson MP, a Department for Work and Pensions minister, said: "It’s fantastic news that today we’ve got two million more women in work than in 2010 and the latest OECD data shows we have the second highest level of women in work in the G7.
“As we grow the economy, it’s vital we make sure everyone can find a job that’s right for them – and importantly that they can progress in work."
What help can I get?
The latest figures will be bad news for people struggling during the cost of living crisis, especially with predictions the energy price cap is set to rise this winter, pushing up bills to nearly £3,000.
But there is support on offer for those in need.
The government announced a giant cost of living support package in May and some households could be in line for up to £1,200.
The first instalment of the £650 cost of living payment has already started hitting people's bank accounts.
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And there are a number of other payments available including a £150 disability payment, a £400 energy bill discount and a £300 pensioner cost of living payment.
There's also help on offer in the form of the Household Support Fund and the £150 Council Tax Rebate.