Paypackets hit by economic woe as two in three workers see salaries cut or frozen

By Kirsty Walker
Updated: 04:53 EST, 3 August 2011

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Under pressure: George Osborne is facing calls to do more to help families who are struggling to keep afloat

Wages have fallen or remained stagnant for the majority of the population over the last six months, research shows.

Two thirds have had their pay frozen or cut since January 2011, despite the rising cost of living.

The figures, based on a survey by the Chartered Institute of Personnel and Development, are set to put further pressure on Chancellor George Osborne to do more to help millions of families who are struggling to keep afloat.

The CIPD, which polled more than 2,000 people, warned that even those who have seen their salary go up could be losing out, as most increases have not kept up with spiralling household bills.

About three in five workers – 58 per cent – said their pay had remained static since the start of the year, while 6 per cent saw theirs cut.

Some 28 per cent reported a pay rise, while the remaining 8 per cent did not know if their salary had changed.

The institute found that the public sector is being hit the hardest, with three quarters of employees having their pay levels frozen – compared with 52 per cent in the private sector.

The figures show that people working in manufacturing and finance were more likely to see their wages increased, while those working in hotels, restaurants and the construction industry were least likely to receive a pay rise.

Struggle: Even those workers who have received an pay increase are still facing difficulties due to the spiralling costs of household bills

Labour leader Ed Miliband has warned that the UK is facing a ‘crisis’ as people are being forced to work for less, while the International Monetary Fund yesterday said there are still ‘significant’ risks concerning inflation, growth and unemployment in the UK.

Mr Osborne also faces criticism over his cuts agenda following the announcement that the British economy grew by a sluggish 0.2 per cent in the second quarter of the year.

Warning: Ed Miliband said the country is facing a 'crisis' as people are being forced to work for less money

Inflation figures later this month are expected to show that everyday costs are continuing to rise.

CIPD spokesman Charles Cotton said: ‘Even those who are lucky enough to get an increase in their pay will find it below the current cost of living, compounding consumer belt-tightening.

‘Inflation figures later this month will highlight growing pricing pressures, which is likely to continue for some time.’

A separate study has found that seven out of ten public sector workers are now considering a move to the private sector to get a better pay deal.

John Salt, director of Totaljobs.com, which carried out the research, said: ‘It is clear that public sector jobseeker confidence is at an all-time low, with a large section believing they are better off in the private sector.’

Meanwhile, another poll found that the poor state of the economy is affecting family life, as workers are forced to spend more time in the office.

The survey of 3,000 employees by the Cornwall Development Company found that more than a third of people have reported a negative impact on their work-life balance in recent years.

They said they now had extra responsibilities, worked in under-staffed offices, and put in longer hours to earn extra money – or out of fear of losing their job.

Dr Alexandra Beauregard, a lecturer in employment relations at the London School of Economics, said: ‘Organisations may think of work-life balance as a luxury they can do without. This is a short-sighted perspective.’