A year-long squeeze on Britain’s pay looks to be over, after wages rose by an annual rate of 2.9% in the first three months of 2018.
Over the same three month period, inflation only increased by 2.7%, after a year when prices increased faster than earnings.
The employment rate also increased, with a record 75.6% of people available for work in jobs. Employers hired nearly 200,000 people in the year to March.
Falling real wages forced many households to borrow money to cover everyday expenses like food and transport.
Increased borrowing prompted the Bank of England to issue warnings to lenders about unsecured borrowing – particularly on financial products like credit cards and car finance.
The Chancellor, Philip Hammond said: “Growth in real wages means that people are starting to feel the benefit of more money in their pockets; another turning point as we build a stronger, fairer economy.”
But it may not be time to crack open the Champagne just yet.
The TUC claims that real wages are still worth £24 a week less than in 2008 – a decade on from the financial crisis.
The trade union body says that wages are not forecast to return to pre-crisis levels until 2025.
Frances O’Grady, General Secretary of the TUC said: “Working people are still not getting a fair deal. Millions of jobs do not pay a real living wage. And average weekly pay is still worth much less than a decade ago.”
Umbrella Insolvency’s Licensed Insolvency Practitioner Tom Fox said: “Rising real wages is good news for people who are struggling to make ends meet, but weak incomes have been a problem for a decade now and it will take a period of sustained wage growth before people start feeling better off.
“Lots of people are still in a worse position than they were a year ago and many still have to borrow money to pay for everyday expenses.”
If you are struggling with problem debt that you can’t pay back, speak to a member of the Umbrella Insolvency team today.
We can offer friendly advice on what’s the best option for you and your family. Call: 0800 611 8888.