MANAGERS and professionals are projected to see only a tiny increase in real pay this year, even if inflation stays close to the Bank of England’s two per cent target.
New figures released by Incomes Data Services today suggest that managerial salaries will rise by 2.3 per cent through 2014, meaning a tiny rise in incomes if inflationary pressures continue to be muted for the next 12 months.
However, the squeeze on higher pay seems to be easing as the economy returns to growth, with fewer than 10 per cent of firms surveyed saying they will freeze workers’ pay in the year ahead.
In comparison, 16.7 per cent of companies said they would institute a pay freeze for 2013.
Consumer price inflation fell back to the Bank’s two per cent target this December, for the first time in over four years. Many analysts expect inflation to stay muted in the year ahead, but a small increase would likely rule out rising real pay.
“The UK economy may be on the road to recovery, but our own survey of employers’ expectations suggest that this greater prosperity is unlikely to translate into higher pay awards for managers and professionals this year,” said Adam Cohen, who collated the figures.
There is some variation between different parts of the economy: managers in the public sector are forecast to see their pay increase by only 1.3 per cent, a slower rate than the inflation target. In comparison, private sector pay for senior staff is expected to rise by 2.5 per cent.
Adding to the lower salary increases, performance-related pay is less common among high-ranking public sector workers: only 37.3 per cent of people working for the government at board level are eligible for a bonus.
The practice is far more common in business, where three quarters of staff are at the same level of seniority qualify.