pay rise

At What Point Will You Ask For A Pay Rise?

Have you felt the squeeze on your disposable income lately? Are you struggling to make ends meet? This is the situation for most people in the UK and abroad, yet due to the lack of jobs and the faltering economy many of us are reluctant to ask for a pay rise. At what point though does a pay rise become a necessity rather than a desire?

Caught Between A Rock And A Hard Place

Energy Bills, Rents, Food, Childcare, everything is on the up! Yesterday the Governor of the Bank of England Mervyn King said that the road to economic recovery would be long & winding and that inflation would likely stay above its 2% target for sometime to come. I don’t know if the Beatles play on words was supposed to make the situation seem less dire but the news won’t have helped the mood of many struggling families. Wages haven’t been increasing at anywhere near that rate, if increasing at all! Many workers also feel powerless to ask for a pay rise because they know there are thousands of jobless people out there who would be more than happy to take their job.

Cuts In Benefit Entitlements

On top of the rising cost of living and the lack of a pay rise, families are also being hit by cuts to benefit entitlements! Housing benefit & Tax credits have both faced cuts either directly through reduced entitlement or indirectly by not keeping pace with inflation. My sister is a self employed child minder who is also a single parent with 3 children. She has recently been hit by a sharp rise in energy costs coupled with a £100 a month cut to her benefits. Like many she is not in a position to manufacture a pay rise and is having to move house to be able to cope with the loss of benefit income.

Why A Pay Rise Could Make Your Situation Worse

You might think that a pay rise could relieve the financial strain you’re currently facing but the opposite may actually be true. Interest rates are currently at a historic low, protecting most from a financial catastrophe. Interest rates can only remain low if inflation is kept under control. If wages were to rise this would likely fuel inflation and force interest rates to rise. A rise in interest rates could be just the thing that sends our already teetering economy over the edge, causing even worse financial pain for most.

How Much More Can You Take?

I’d love to offer advice on how to get yourself a pay rise but I completely understand the dilemma that most hard working people face. Do I ask for a pay rise and risk heading to the top of the redundancy list, or struggle on and try to make even more spending cuts wherever possible? How much more can you take?

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4 Responses to At What Point Will You Ask For A Pay Rise?

  1. Jason @ WSL says:

    It seems like things have been stagnant (or heading backwards) for most countries. I know a lot of people here didn’t get raises for a few years, but I think they’re starting to come back a bit. It’s unfortunate that getting a raise may cause inflation, but I think I’d still take that chance. :)
    Jason @ WSL recently posted..Saving Money on Your Home Security SystemMy Profile

  2. Jason Clayton | frugalhabits says:

    It’s getting rough out there… that’s for sure. Most people are feeling squeezed. On one side is inflation eating up all your cash, on the other is looming tax increases, and then on the 3rd is a lack of raises.
    Jason Clayton | frugalhabits recently posted..5 Simple and Odd Things I do to Save MoneyMy Profile

  3. I think in this day and age it’s only reasonable to ask for a pay rise if you well and truly deserve it, not just because of inflation.

    Why not meet somewhere in the middle – ask your boss for a performance related bonus. If the company’s sales/performance/success can be related back to the work you are doing then it would be hard for them to argue against it.
    Heather Collin | SoSwitch recently posted..It’s not sexist – it’s just women being savvy…My Profile

  4. there is no doubt that businesses are using the shoddy economy as an excuse to cut back on benefits for their employees… which is sad. but the sad truth is that many employers wouldn’t care if you were going through a hard time in deciding whether or not to give you a raise…
    Jefferson @ See Debt Run recently posted..Should You Refinance Your Home Loan… Again?My Profile

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