It’s no secret that times are tough in the UK. The heavy hand of inflation is felt in almost everything we do – whether that’s our gas bills, groceries or transport costs – and the outlook is increasingly grim for many British families. That’s why it might be time to find a new job – and the best way to do that is to engage the UK’s best professional CV writing service.
In order to keep pace with rising inflation, your wages need to rise by a commensurate amount. This leads to a question many people find themselves asking: are my wages keeping up with inflation?
What is inflation?
Simply put: inflation is the rate at which the cost of goods and services rise year by year. It is not a historic comparison, but only a comparison of the previous year’s prices. This means that 0% inflation still means that you’ll be paying more than you did two years ago.
What is the usual rate of inflation in the UK?
According to the Bank of England, inflation of around 2% is desirable. However, in the past ten years, inflation has typically been higher than this; since 2012 inflation has been higher than 2% in seven years out of ten, and last year it was 4.1%. In April of this year, inflation hit a whopping 40-year high of 9%.
Given these levels of inflation, it’s well worth looking at your wages – are they keeping up with such high rates of inflation? If not, maybe it’s worth brushing off your CV – it might even be worth giving yourself an edge by consulting some professional CV writing services!
What impact will such high inflation have on me?
The effects of inflation will vary from person to person, as we’re all unique – perhaps you have slightly higher mortgage payments or spend less on groceries, for instance – and so it’s difficult to say how it will affect different people on an individual level.
There are a number of online calculators that can figure out how inflation will personally affect you, but the best one to use is probably the one found on the website of the Office for National Statistics.
Is wage growth in line with inflation this year?
Unfortunately not. Though the average monthly wage went up by about 4.7% in April of 2022, after factoring in inflation this meant a drop in real pay of approximately 3% -- the biggest drop since 1977. Coming rises in energy costs and all of the concomitant effects of that will make things even harder on the average household.
In a bid to combat an increasing gap between pay rises in the private sector (5.9% from April to June 2022) and the public (1.8% rise in the same period), certain professions are set to receive substantial wage boosts. New teachers will start on a wage 8.9% higher as of September, and nurses, doctors and other NHS staff are all set to receive wage increases from 3% to 9%. This is not enough in some cases, however; the Royal College of Nurses asked for a rise 5% above inflation, and the recent RMT rail strikes threaten to spill into other parts of the public sector unless these concerns are addressed.
How much of a pay rise do you need to keep up with inflation?
Firstly, it’s important to note that any pay rise that is not above current inflation is functionally a pay cut. That means you need an increase in your wages of at least 10% to be in the same financial situation as you were last year.
That said, when requesting a pay rise from your employer, it’s best not to couch it in terms of inflation and living costs. After all, everyone is affected by inflation, and your company’s HR department will already be accounting for inflation (though this is likely be calculated assuming inflation of around 3%, which clearly does not match the reality of the situation in the UK at present).
It’s worth looking at the kinds of wages that competitors in your industry are paying; this will help you to figure out what sort of pay rise you can realistically request. And if you’re not able to secure a pay rise that will ensure comfort for you and your family, it might be time to seek some CV writing advice and start looking at alternative employment.
Why do wages, in general, not stay ahead of inflation?
The reason companies do not consistently hand out pay rises consistent with inflation is because that wages are ‘sticky’ – that is, wages rarely, if ever, go back down once put up.
It’s difficult to reduce wages once they’ve gone up – nobody likes to take an actual on-paper pay cut, after all – and so companies are reluctant to be too generous with pay rises, lest the market later dip and they’re significantly out of pocket.
Will changing jobs (perhaps with the help of a professional CV writing service) help me stay ahead of inflation?
The research is suggesting that it might. A study from Pew Research Centre in the US found that, from April 2021 to March 2022, workers that quit and found new jobs ended up, on average, earning 9.7% more. Those who stuck with their original employer? Their real wages dropped by about 1.7%.
This doesn’t necessarily mean that you should jump ship and find a new job – but it’s certainly an option worth considering. And if it’s something you think might be a good move, it’s a good idea to tidy up that CV and fully prepared for job-hunting. What’s the best way of doing that? By engaging a professional and getting some quality CV writing advice!
Dust off that CV and give it a once-over with a professional CV-writing service!
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