Gas surge: how the FT covered inflation predictions today
As inflation roars on uncontrolled and is predicted to hit 18per cent by early 2023, research published this week suggests that the average person needs a pay rise of at least £3,500 just to keep up.
And that’s to keep up with an inflation rate of around 9per cent – half of what seems to be coming our way in the cost of living crisis created under the shambles of the AWOL government of Boris Johnson and his Tory mates.
Research by RIFT Tax Refunds has revealed just how much the average person would need to see their pay cheque increase by in order to keep up with inflation and what it means when it comes to the tax they pay and the money left in their pocket.
The average gross salary in this country is currently £37,235.
But figures released this month by the Office for National Statistics showed inflation at its highest rate since December 1990, with the Consumer Price Index at 10.1per cent in July.
On the rise: ONS figures see inflation going only one way
In order to match even the current rate of inflation, the average person would need a pay rise of £3,500. While this would see their tax bill increase by £1,164 per year, it would also leave them with an additional £2,336.
RIFT’s researchers provide a number of examples.
The average beautician would need to see a £1,461 increase in their annual gross earnings in order to keep pace with the current rate of inflation, paying £486 more in tax contributions but taking home £975 more per year.
Those working in construction would need to see a pay rise of £3,074, boosting their annual net income by £2,053, while increasing their tax bill by £1,022 per year.
The average nurse would need to take home an additional £3,138 per year which would increase their net income by £2,095 annually while seeing them pay £1,043 per year.
The average teacher also needs to earn £3,331 more than the current average earnings in order to battle the impact of inflation, seeing them take home an additional £2,223 after tax and paying £1,107 more in tax contributions.
The rate for the job: wage rises of £3,500 or more are needed if these workers are just going to keep pace with inflation
Bradley Post, the CEO of RIFT Tax Refunds, said, “Many households are struggling to combat the increased cost of living due to the current rate of inflation, with many attempting to do so on a stagnant level of income that hasn’t seen the same level of growth.
“In fact, in order to match this pace, the average person would need to see quite a considerable boost to their annual earnings to the tune of £3,500.
“However, the unfortunate reality is that many simply won’t and this will leave them at a severe disadvantage when it comes to managing their household finances.”
Read more: Exec pay outstrips workers’ salaries by more than 100 times
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The table of current average salaries is really interesting. I had no idea that the average nurse’s salary is in excess of £33,000 a year; or that the average surgeon’s salary tops £200,000 a year. I thought that NHS salaries ranged from appallingly low to bearable, but it’s good to see that they are now keeping pace with society at large.
“Average” is a dangerous statistical word, however, and a better layman’s understanding would derive from the use of “median” salaries. The news presented in another IC article which compares the trend in top executive salaries to that in “workers'” salaries gives a much better view of what I find to be the most worrying of all social trends – the inexorable movement from our alleged democracy towards plutocracy.
The main problem with the continual of adjustment of pay levels to keep up with inflation is that the process itself is inflationary! Nevertheless, it is essential that “workers'” pay levels are kept up with inflation, and I would like to see those “top executives” given a pay CUT to balance out the inflationary effect. Maybe there was a fiscal logic to those old concepts of supertax …..