Millions of UK workers warned they need to find a £1,200 wage rise soon

Millions of UK workers have been warned they need to stump up £1,200 to keep pace with inflation. UK workers need a £1,200 pay rise for wages to keep pace with inflation, according to economic forecasts, as the Cost of Living crisis continues.

In 2023, earnings saw a hike 5.8 per cent to reach an average of £35,404 per year but the increase was undermined by annual inflation of 7.3 per cent. In 2022, inflation hit 9.1 per cent in the same year the average salary rose by 6.4 per cent to £33,449.

Jason Ferrando, CEO of easyMoney said: “With inflation finally starting to slow after three years of remarkable growth, now is the perfect time to be asking for a pay rise in line with inflation. This bump in earnings would only need to measure at least 3.5 per cent as opposed to almost 10 per cent a couple of years ago, so bosses and companies are going to be far more likely to oblige than they might have been in the recent past.

READ MORE UK tourists in Spain losing £20 'on spot' and warned to 'walk away'

“The downside of this is, of course, that a rise in line with inflation isn’t as much this year as it would’ve been before, so you might want to look at investing to bolster your income.” There are many ways to invest money, such as the stock market or buying property, but these tend to require huge sums of upfront cash to invest. A “far more accessible option”, according to Mr Ferrando, is an ISA.

He explained: “The main selling point of ISAs is the personal ISA allowance which states you won’t pay tax on the interest you earn from an ISA investment of up to £20,000. There are various types of ISA to choose from. A traditional cash ISA is essentially a savings account for which different banks provide different rates of interest usually ranging between four percent to six percent annually.”

He noted: “Even stronger returns can come from alternative ISAs such as Innovative Finance ISAs (IFISAs). An IFISA enables you to use your personal ISA allowance to invest in peer-to-peer lending and can generate higher returns.”