By Vivienne Russell | 7 June 2012
Pay growth in the public sector has slowed to a record low, according to salary data published today.
The VocaLink Take Home Pay Index collates household earnings figures for different sectors of the workforce. It showed that, over the three months to May, annual take home pay growth in the public sector was 0.6%, the lowest since March 2008.This was in stark contrast to the manufacturing and services sector, where take annual home pay growth remained buoyant. In manufacturing, pay increased by 3.9% over the three months to May, whereas in services it improved by 2.1%. The index for FTSE 350 companies showed an annual rise of 2.3% for the three months to May, up from 1.8% over the three months to April.
VocaLink said this reflected an increase in service sector pay growth. It added that the increase in the tax-free personal allowance, which rose by £830 to £8,105 was also likely to have made a difference.
David Yates, VocaLink chief executive, said: ‘After months of turbulent take home pay growth, it is promising to see the UK’s private sector starting to pick up, with the highest level of take home pay annual growth since December 2011. The tax-free personal allowance introduced in this year’s Budget has evidently reduced the tax burden for many and will have removed some low earners out of income tax entirely.’
