The Institute for Fiscal Studies (IFS) has outlined the wage prospects of UK workers as “dreadful” after Chancellor Philip Hammond’s first Autumn Statement.
The IFS states that workers will be worse off financially in 2021 in real terms than they were in 2008, with lower income families to be the worse affected.
Paul Johnson, Director of the IFS, said that “this has been the worst decade for living standards certainly since the last war and probably since the 1920s”.
He added “The outlook for living standards and for public finances has deteriorated pretty sharply over the last nine months…half of the wage growth projected for the next five years back in March is now not projected to happen”.
The Conservatives policy to protect pensioners through a range of benefits, including the pensions “Triple Lock”, has meant that since 2007 living standards for the over 60s have risen by 11%. In contrast, the Conservative attack on the younger generation through rising tuition fees and lack of support in property purchasing, along with wage stagnation, means that living standards for 22-30 year olds has dropped 7% in the same period.
The poorest will be hit hardest by this announcement, with a 3% hit to the income of lower income families by 2020. The freeze is working age benefits and tax credits from April 2016 is largely to blame for this outcome.
The IFS also announced that national income would be £30bn lower in 2020-21 than predicted in March, which averages out to a loss in income of £1,000 per household.
In light of this UK wage stagnation, is it worth considering a move abroad to realise the true value of work. Data from the OECD shows that the average UK salary was $41,384 in 2015, below 9 European countries including Ireland, Norway, Netherlands, Denmark and Austria, as well as Canada and the USA.
Hays in the Middle East also noted that in a survey of 2,000 employees in Q4 2014, that 62% of respondents had received a pay rise in 2014, and 28% of this bracket received a pay rise of 28%. Average annual pay for a Financial Analyst is $70,000, compared to a range in the UK between £30-50k.
If you’re considering becoming an expatriate and want to know more about the range of investment and savings options open to you after you move, or should you wish to assess your investment needs or portfolio please contact us, or alternatively schedule a free, no obligation, consultation, with one of our Financial Advisors here.
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