With price inflation remaining stubbornly above the government target, new research suggests that millions of workers are not expecting to receive a pay rise this year.
The research from uSwitch found that over 16 million workers (56%) are expecting a pay freeze in 2011.
Only 11% of workers have already received a pay rise this year, as we approach the end of the first quarter.
Assuming these expectations are matched by reality, taking no action will result in the gap between income and expenditure closing this year. Higher prices reduce the purchasing power of income which remains the same.
Good Financial Planning can enable you to receive an effective pay rise despite the expected pay freeze.
Expenditure can usually be reduced following a thorough financial review and there are often opportunities to minimise the percentage of income spent as taxation.
Finances could get tougher for many households in 2011, assuming price inflation remains high and employers keep salaries on hold at 2010 levels.
With proper Financial Planning, those employees who are on the receiving end of a pay freeze this year have the opportunity to give themselves an effective pay rise.
Photo credit: Flickr/wwarby
