General Chat

This week the government is saying most people in the UK have seen their take-home pay rise in real terms in the past year. Ministers say new figures show everyone except the richest 10% saw their take-home wages rise by at least 2.5% once tax cuts were taken into account. They also say that consumer goods inflation is rising at a slower rate than wages.

I thought I lived in the UK, I must have got that wrong, because despite the increase in the state pension that came into effect in April 2012 of £5.30 a week and the governments promise that pensions will always rise by the greatest of inflation, earnings or 2.5 per cent - why do I find that my disposable income buys less year after year after year. Take home pay may have increased but that does not mean that people are better off :-(

Does your take-home pay or pension stretch as far as it used to or is this the government just manipulating the facts to make them say what they want them say?

Personally I think economic growth built on low wages, high house prices, increased personal debt, and the hopes that high speed rail and fracking for shale gas, will not solve the problems of low wages and the chronic shortage of affordable homes - for most ordinary working people.

Dear One Foot

Hello

I have to say, the salary is not going up that much at all but the prices
for essential outgoings is way beyond reasonable.

Most people where I live are struggling to keep going.


Take gentle care, One Foot
Best wishes
Elizabeth,
xx

Invest £2.00 with interest of 1.5% and after one year the RPI is 2.5% .. you loose..
Your £2.00 is worth less than it was when you put it into savings
As for personal PAYE Tax cuts? yes the government just keep on spouting this while the employers are paying more and more in NI contributions and that is why we cannot afford to employ more people. or increase wages

I work for local government, and thanks to re-grading - you've got it, managers went up a grade, those they rely on went down and lost pay - and the 5 year pay freeze we've been on, my take-home pay is the same as it was 11 years ago :-|

Meanwhile, rent has risen, utility bills have skyrocketed, bus fares have more than doubled......

If that's what he claims, that someone's better off, and as the head of the council had a £47k pay rise last year, you can guess what 'class' are better off. But then again, he never looks further than his nose, so as far as he's concerned, as long as his pals are better off, that's most PEOPLE - the rest of us are the scrapings off his shoes. :-| :-| :-|

Well being a special needs aux in a local school, i can tell you since i started in 2006 i am still on the same hourly rate and have had no pay increase whatsoever. Before I took the job, I cleaned 2 days a week for an elderly gentleman. He paid me £10 per hour. It was only 4 hours a week but it helped pay the bills. I get less than that for being a proffessional and for graduating from UNI last year.

What annoys me even more is my utilities bill for the year totals some £2600.00(for oil and electric) between my oh and myself, our combined petrol bill per week is £100 thats £400 per month without even going out!

With food prices increasing on a weekly basis, how can the government say, my take home pay is more now than it ever was.

I remember when we first married, my electricity unit price was 5p and now is 16 p. We still use more or less the same units but the price has trebled!

We hardly go out and socialise, dont smoke and only occasionally will i have a glass of wine(xmas and new year)OH is teetotal. Dont know where we can cut down unlees we freeze and starve!!
Florence
in the hebrides :-( :-P

When I first moved away from home, 40 years ago, my 4 roomed privately rented flat cost £8 a week, my pay (as a clerical assistant in the MOD) was £40. Then, a 'fair' rent was put on it - up to £10 a week (this included rates) - a quarter of my wages.
I now live in council accommodation - albeit a 3 bedroom property, the rent and council tax is half my (local government) wages.
A one bedroom council flat is all of £5 cheaper a week. :-S

I wish we still had 'fair' rents!!

When does the new tax level start? I thought I read that the amount earned would be higher before being taxed but can't remember when it comes into play. I have a book somewhere where I wrote down my income and expenditure when I rented a house in the early 1970's, wish I could find it to see what the figures were. I always had enough to manage on then and didn't get into debt. Wouldn't be that way now I don't suppose, glad I am not having to start out again.

Lizx

I have just retired and largely dependent now on OAP and some small private income. In last 5 years we had a 1% to 3% increase in my job, averaging out about one and a half percent per year. Better than local government increases, but was still earming far less than a dustman or pen pusher behind a council "help desk" when I retired last October.

Yet I found my spending power slightly increased over that 2008-2013 period. You did need to shop round, to "cherry pick" bargains and buy in bulk. If you still paid a mortgage, that has been a real bargain these last few years and has made a big difference - as one who remembers paying 22% interest at one point. Shares have gone up - both in actual price of shares and in dividends paid out.

Company pensions, sick pay, holiday pay, company shares, bonuses are usually very good - and were hardly in existence when I started work 50 years ago.

I have finished up on slightly more retirement income that when I was working. Not a massive amount in either case (less than £16k) but I have just enough to live comfortably and the increase in my OAP and further hikes in tax exemption band means that I will have something like a 5% increase this April and April 2015 and probably beyond. Do we just complain for the sake of it, I wonder.

I do of course realise a lot are struggling. I just wonder how much of it is due to personal debt on things like credit cards (30% APR), store cards (50% APR) and pay day loans (4,000% and more). And pets can be exceptionally expensive and far more poorer families seem to own pets these days.

Purple **^*Sparkly*^** Diamond - I presume the new tax level you mention refer to the amount you can earn before you start paying income tax, if so these are the allowances, if I have got these wrong someone will correct me.

The Personal Allowance for people born before 6 April 1938 from 06 April 2012 to 05 April 2013 was £10,660 per annum and from 06 April 2013 to 05 April 2014 it will be the same £10,660 per annum - on income up to £26,100 per annum.

The Personal Allowance for people born between 6 April 1938 and 5 April 1948 from 06 April 2012 to 05 April 2013 was £10,500 per annum and from 06 April 2013 to 05 April 2014 it will be the same £10,500 per annum - on income up to £26,100 per annum.

The Personal Allowance for people born after after 5 April 1948 from 06 April 2012 to 05 April 2013 was £9,440 per annum and from 06 April 2013 to 05 April 2014 it will be £10,000 per annum - on income up to £100,000 per annum.

However, these increases do not spell good news for everyone because due to the incrreases in personal allowances many will find their entitlement to certain benefits will be reduced - you know the scenario "with one hand he giveth and with the other he taketh away" ;-)

Those who are earning low wages don’t necessarily recognise that they have more personal allowance than in previous years. They only see the percentage rise as advised by their employer.

When 2 separate people have brought this topic up in conversation, one employed in an Academy School was given a 1% increase but lost a ‘Special Needs Allowance’ despite still working with them. The other who works in a Commercial Bank had a rise less than the cost of living despite contributing to a turn-around in the Bank’s profits.

(This post has been edited)

Which comes first, is it a price increase or a wage increase? They are inextricably interlinked. If the worker paid to produce an item gets a pay rise then inevitably the price of the item has to be increased otherwise the manufacturer's wages (Their profit) will be reduced. So the item now costs more to buy so the worker asks for another wage increase. It is a never ending spiral that does nobody any good but harms those most who are on fixed incomes such as pensions.

In some respects a recession is not all bad news as it tends to slow down wage increases and some prices or at least it prompts people to look hard at where and on what they spend their money. By increasing the tax and N.I. thresholds at least people now get a bit more money in their pocket that they can decide what to spend it on.

Wage increases without justification just fuel inflation. If you work longer or harder or more efficiently then a wage increase can be justified. Simply not having had a wage increase for a year without now working longer, harder or more efficiently is not justification.

DET,
My older sister and a brother both own their own houses, have paid off the mortgage and retired. Unfortunately, my marriage broke down so I was left bringing up 2 children on my own. Their father managed to buy a house later, though, but he, at 64, is still working to pay the mortgage.

I have been looking around for work. It was only just over 2 years ago that people were informed officially that those born after a certain date will retire later. I was 55, with 5 years left, now I'm 57 with 9 years left - it's not easy getting a new job that pays the bills at my age.
I'm just glad I didn't take the final salary related pension - apart from not being able to pay it at the time, it would be heartbreaking to have paid out money I could ill afford, only to end up with probably just enough to take me out of any financial help.

As to the pay rise - nothing. Same as their 'action' over workload stress.. All very well making people redundant - usually higher grades with a nice little bonus thrown in - but the work doesn't disappear, the 'lower' grades are suddenly, apparently capable of doing 3 times the work!!

It's not just me, the whole team (5 of us) are suffering. One colleague, who is on Prozac has had her doctor increase her dosage.
My health has deteriorated and my sick leave is rising. This isn't me 'declaring' myself ill - it's my doctor stating I am ill.
I can't take a pill to make me better, though Occupational Health last year suggested I took extra strong painkillers to hide the pain so I could work. Just as well me and extra strong painkillers don't get on, (I started to slur - not good when answering the phone - and my head was 'somewhere else') as they're very bad for my condition.
This year, with workload ever rising, they're now suggesting I'm ill because I can't do my work - a nice way to avoid my claim of workload stress.
I've suggested higher management have no idea of the amount of work we do - this has been confirmed by our line manager asking for a list of exactly how many courses, and how many dates, pack-ups etc are involved.
However, they're now trying to claim my diet is affecting my health and condition - talk about desperate measures - so, at their suggestion, I went to a dietician last week, but kept a record of everything I ate & drank for the 2 weeks before I saw her.
She said my diet couldn't be causing my illness, she couldn't define a 'healing' diet, because, with my condition, everyone is different.
Apparently it is a very healthy diet, and the fact that I had identified certain foods that could cause problems and avoided them was the best I could do.
I've still to inform my line manager of the outcome, and inform that I have, in the past, studied nutrition, so am actually well aware of how to eat healthily.

Sorry, I rambled but my sick record isn't a good omen for a new job either. But this is happening in councils all over the country.

For any individual to be able to be able to pay for basic essentials, such as a roof over their head, food on the table, gas, electricity, water, and the costs of travelling to work, they need to have a job that will pay sufficient to cover these.

Much is made about the number of new jobs that have been created, any increase in the number of new jobs is welcome, the problem is, that a very large number of the new jobs that are being created are low paid jobs or jobs on zero hour contracts, and these jobs make it difficult for many to earn sufficient to cover the basic essentials above.

Despite the current optimism in certain circles, the economy is still quite fragile, albeit there is some growth, but it is growth that benefits the few - not the many. As I said in my OP an economy built on low wages, high house prices, increased personal debt, will not solve the problems caused by the lack of proper jobs, low wages and the shortage of affordable homes. When interest rates rise, and they will rise - sooner than most anticipate, the current optimism will be short lived.

The D&G show are just showing off there undoubted skill at spinning a yarn from a collection of disparate and unrelated statistics. It is disappointing to see hitherto respected figures such as Mark Carney come out with such drivel as "low interest rates for an extended period". That the financial markets don't believe him is obvious hence the rising £.

So now we know for sure. Tory re-election strategy is based on an artificial housing bubble and repeating six times after breakfast "You've never had it so good". If the bubble lasts until Jun 2015 the pain as it bursts will be massive.

Unlike under Mrs Thatcher or even Tony Blair the coalition have not implemented one serious supply side reform and neither have they made any real dent in the structural deficit. Indeed the deficit has recently whizzed up by £ 38bn as UKGov has been forced to admit that Network Rail is in reality a govt dept. HS2 will pile on the deficit agony.

Taking account of the full cost of living - energy, food, rents/mortgages, real take home pay - only those grossing over £ 150 K pa are better off and then only marginally before you hit the big time. Even £ 150 K does not take you far in SW London if you are youngish with a couple of young kids and a mortgage. Non-resident landlords are of course making a killing out of slicing up south London into flats rented out at stratospheric prices with evil social consequences.

Quite how D&G's song and dance routine will play in the 100 key marginals is anybody's guess. On the one hand about half the LibDem vote has deserted mostly to Labour but also to don't know and the Tories. The Tories themselves look like losing 10% of their vote to UKIP which could swing the election overall and is now what D&G fear most.

On the other side of the street Labour remains a mish mash with no coherent policy. Friday's pronouncement of a Labour commitment to a balanced budget paying down the deficit is either (a) a demonstration of economic ignorance of a startlingly high degree or (b) 2c worth of nonsense designed to counter D&G. Most likely the latter.

The smart money is on a LibDem/Lab coalition with Vince as chancellor. No wonder.

Maggie – I’d edited/partially deleted my post while you must have been typing.

How ever. Despite the personal problems you have, I do still feel that the Unions ought to be more forceful when it comes to wage negotiations.

As much as we females feel aggrieved, ever one of us born after a certain date now have to work until we are 66 or more.

Even those who have been fortunate enough to be able to put something aside or paid in to a pension have had their plans upset. I’d thought that I’d be able to draw my OAP at 63, only to have it postponed until 65. So that’s another 2 years when we are going to have to draw on savings as opposed to the 5 that we had counted on.

Lets hope that the economy picks up and that employers are more willing to offer a job to someone with your experience at a sensible rate of pay.

I read all of Rollo's post. Is there some sort of medal for that?

I think it makes a lot of sense. I am sure most of us are worse off than 5 years ago, but that was promised - "we are all in it together". And the envy of looking at Chief Executives of Local Authorities and business leaders really does not help. All of those working can try for those jobs and they have a chance of getting them (though I rather think conscience would kick in when you find yourself earning £150k with a fully expensed Merc for achieving dicky mint).

As for next election, I think Labour and Lib Dem would be a most attractive package. Tories would have to side with UKIP, and UKIP are very quickly imploding as a political party and will drag Tories down. But with Tories on 30% and UKIP on 19%, that would make an interesting partnership for next election.

What Labour need to do strategically is take a back seat for a couple of years. Clegg needs to be Prime Minister with Ed his Deputy for 2-3 years and then swap jobs. Same with Exchequer. Vince is far too old now, but Danny Alexander would make sense as Chancellor for 2-3 years. And they do need to keep Balls away from any economics portfolio. Minister of Sport might be a suitable way to shunt his staring eyes, running commentary and gestures from the front bench at Prime Minister's Question Time.

Thanks RolloTheRed - your post adds a lot of relevant points to the discussion

DET - please don't call them my 'personal' problems - that's what work is trying to do. My personal life is fantastic albeit on a pittance - it's work that causes the problem :-D

The difference between the world Dave & George live in, and the world the low paid live in, is highlighted by research from the The Joseph Rowntree Foundation and the Money Advice Service.

According to the research, there has been a steep rise in the number of British households unable to afford a decent standard of living over the last three years.

A combination of recession-hit incomes, benefits cuts and the soaring cost of living have meant that numbers living below an "acceptable standard" has increased by 900,000 since 2008/09.

The Joseph Rowntree Foundation said a decent standard of living for a single person was afforded when they had a disposable income of £185 a week after housing costs.

Co-author Donald Hirsch said - Young people, single people and people in private rented housing have done particularly badly relative to the minimum income standard during the downturn. A whole generation of young adults are noticeably worse off as a result of the deterioration in their job prospects, a worsening of housing options and falls in real wages and benefits, making it harder for young people to be independent.

http://www.thisismoney.co.uk/money/news/article-2545175/Households-acceptable-standard-living-fifth-three-years-Rowntree.html?ns_mchannel=rss&ns_campaign=1490

£185 after housing costs!! Therein lies the problem. A single person with £180 after housing costs is encouraged to think of themselves as poor.

When I last had a well paid job (in 1990's), my housing costs were well over £2,000 a month for 10 long years. I was earning in excess of £70k for first 3 years, could afford it and paid high rate tax on some of income.

Then income dropped back to about £3000 per month (just under £50k per year gross). And then to £30k, then to £15k when we moved to South Wales. So even when I was earning nearly £50k, the Rowntree Foundation would have said I had less than £185 per week after mortgage, rates, heating and did not have a decent standard of living. :-0 :-0

I don't think I have ever got near £185 a week disposable income in last 20 years. Yet we run cars and used to shop weekly in Waitrose, though I do enjoy frequenting Lidl, FarmShop and Tesco more these days. I have less than half that £185 to spend these days, and honestly do not feel poor in any way whatsover.

Rowntree was so wealthy that he was able to eat chocolate every day. The Scottish ate haggis, we Welsh had lobscaws, no wonder his idea of poverty is miles away from reality. And no wonder people are getting loads of benefits that they really do not need.