Despite a slight drop from July to August, inflation again headed above the ten per cent mark as of last month.
The ONS (Office for National Statistics) recently revealed that the 12-month rate of Consumer Price Inflation increased to 10.1% in September – a jump of 0.2% from the previous month.
While the CPI rate had dropped by 0.2% from July to August, the new figures see that drop cancelled out and a return to the July high.
Within that overall figure, rates on goods and services can fluctuate, with food jumping to an astonishing figure of almost 15% – an increase from 13.1% to 14.6% in September.
With the current cost of living crisis affecting many aspects of household spending from fuel to hotel stays and clothing to furniture and household goods, how much would your pay have to rise in order to beat inflation?
Luckily, there are ways of working it out. Here’s everything you need to know.
How to work out what your pay should rise by to beat inflation
The ONS run a calculator service for working out how much your pay should increase by using the latest inflation figures.
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All you need to do is input your current salary, and the calculator will show you how much your pay should rise by to beat inflation.
For example, according to the ONS, the average national salary for full-time work in the UK in 2021 was £38,131.
To keep in line with inflation, that would need to increase by £3,356 to £41,487.
How much are salaries rising by?
While the ONS calculator shows you what you would need to earn to match inflation, it also shows you what your pay rise would look like if it increased in line with the current average pay growth, as the two are not always the same.
For example, while the salary of £38,131 would need to rise to £41,487 to match inflation, it would only rise to £40,419 if it increased in line with average pay growth.
When a worker is awarded a pay increase that is not in line with inflation, their salary is, in effect, worth less. This is because inflation drives up the cost of the goods and services they need or want to buy.
In the previous example, this would mean your earnings would be worth £1,068 less per year in real terms.
The ONS’ latest figures released in October 2022 state that the rate of annual pay growth for total pay was 6%, and the annual pay growth for regular pay was 5.4% in June to August 2022.
How have workers responded?
The difference between inflation and real terms pay has been a problem that has been at the heart of many of the industrial disputes seen throughout the summer and is set to continue through autumn, with some rumours of the (albeit unlikely) potential for a general strike.
The issue is complicated, with unions seeking pay rises close to inflation to help their members and some employers claiming big pay rises can stifle investment or expansion.
For example, according to the Nursing Times, nurses in England and Wales were awarded a pay increase of at least £1,400, which (though in line with the NHS Pay Review Body’s recommendations) fell below the inflation-busting pay increase which unions, including the Royal College of Nursing and Unison, had been campaigning for.
Nurses.co.uk also states that: ‘This pay award means that a newly qualified Nurse at the start of Band 5 will now earn £27,055 a year, up from £25,655. This represents an increase of more than 5%.’
‘Meanwhile, a Nurse at the start of Band 6 will now earn £33,706, up from £32,306 – representing a rise of just over 4%.’
‘A Band 8C Nurse will earn £67,064.00. Before the increase, they were earning £65,664.00. That’s an increase of £1,400, but represents a real increase of just over 2%.’
RCN and Unison nurses are currently balloting on strike action, with health secretary and deputy PM Thérèse Coffey saying she does not expect they will receive a higher pay offer this year.
The RMT (National Union of Rail, Maritime and Transport Workers) announced fresh strikes yesterday, accusing Network Rail of performing a U-turn on a pay offer. However, Members of the Criminal Bar Association voted to accept a government pay rise of 15% on legal aid fees for most crown cases and ended strike action.
What can you do about your salary?
If you aren’t a member of a Union, negotiating a pay rise on your own can be difficult but by no means impossible.
Metro.co.uk has plenty of advice on negotiating a salary rise, top tips on how and when to ask for a pay increase, and advice from experts on getting a pay rise.
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