Real wages fall with more bad news forecast

Workers saw wages fall in real terms this year with the trend set to continue next year, according to new research.

Median pay awards ran at a below-inflation 2% in 2013, pay specialists XpertHR said, with few settlements forecast to be worth more than 3% in the New Year.

A study of almost 100 agreements in the past three months showed that one in eight involved a wage freeze, with settlements at 1% in the public sector.

The latest RPI inflation rate is 2.6%, and the report said it was predicted to be around 3% next year, with pay awards in the private sector expected to fall between 2% and 3%.

Sheila Attwood of XpertHR said: "The 2% benchmark pay award during 2013 is lower than employers had predicted, but reflects the fragile economic recovery.

"Employees will be hoping that they receive the predicted 2.5% pay award for the coming year."

TUC general secretary Frances O'Grady commented: "It's no wonder so few people feel they're benefiting from the recovery when their wages have continued to fall behind the rising cost of living throughout the year.

"It's worrying that Britain's longest real wage squeeze in over a century looks set to continue into next year.

"With profits rising, employers need to offer fairer pay rewards for their staff, and government should do all it can to encourage them.

"This is the only way to make the recovery work for the majority, and not just a privileged few."