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Pay rises dwarfed by bill hikes

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A new report by uSwitch has revealed the average pay rise in the UK this year is only 3.4% against a 9% rise in bills.

The average net monthly increase to UK salaries from 2007 to 2008 is £61 for the private sector, £31 for the public sector and £44 overall – against a £148 a month increase in essential living costs.

Nine million of us are not getting a pay rise this year, a further 13 million will receive a pay rise below the retail prices index and over five million people will get a pay rise falling short of the consumer prices index.

The gap between the public and private sectors is growing, with pay rises so far this year showing a 66% pay gap between the two groups. In the meantime, soaring household costs have created a burden for the nation with essential bills rising by an average of £1,783 this year. Against the backdrop of inadequate pay rises, UK households will be left out of pocket to the tune of £21bn.

Ann Robinson, director of consumer policy at, said: “This is crunch time for UK households as we face up to a downturn in the economy, the news of below-inflation pay rises and the reality of having less money in our pockets.

“We are working harder, but are certainly not getting any wealthier. Hikes in taxes, the cost of food, utility bills and social contributions over the last decade have outpaced the overall rise in income levels, to push disposable incomes in the UK to their lowest level in a over a decade. This research indicates that things could get a lot worse before they get better.

“Consumers can help themselves by taking a long hard look at their own household budgets to see where they can cut costs. There are positive signs that consumers are already cutting back, curtailing spending and trying to clear outstanding debt. With a careful eye and a steady hand on the household budget, most should be able to weather the storm.”



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