Real Britain Index shows effect of pay cuts

Reposted from Public & Commercial Services (PCS) website

Nothing we didn’t already know, despite the lies the tories try and feed us!

New cost of living figures – The Real Britain Index – reveal the real effect of pay cuts by looking at how inflation affects different income groups.

The index, which will be updated monthly, launched this week by the New Economics Foundation, will be published coincide with the Office for National Statistics inflation index. It shows the poorest in society are hit hardest by the spiralling cost of food, clothing, energy and housing. It also reveals civil servants on median pay face a true inflation rate of 2.36%, while the government’s preferred Consumer Prices Index was at 1.2% for September.

PCS is a sponsor, as is the TUCG and Unite.

The analysis shows official inflation figures have underestimated the decline in UK living standards:
◾True impact of inflation on poorest 50% understated by official measures
◾Richest receive “inflation bonus” because they spend less on essentials
◾Poorest in society see incomes after inflation fall by 14.5% in a single year
◾Return to rising incomes over last year for richest 10%.

The RBI website, created by the team behind the False Economy andMyDavidCameron websites, shows how official inflation figures mask the real impact of rising prices. It has already gained significant media interest this week in:
◾The Guardian
◾Huffington Post
◾Morning Star
◾This is Money.

The index shows, for example, that since 2006, the UK’s poorest people have faced the biggest price rises:
◾Poorest 10% – prices up 32%
◾RBI average – prices up 28%
◾Richest 10% – prices up 27%
◾CPI – prices up 26%
◾Food prices up 40%
◾Housing prices up 15%
◾Energy prices up 73%.

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3 thoughts on “Real Britain Index shows effect of pay cuts

  1. Charles Loft

    With so many people living on credit, surely the cost of this needs factoring in.

    Up to 3 million households pay their entire mortgage on their credit cards.

    However, there is the most vast difference between those who can roll
    balance transfers at say 3% cost onto 0% deals, and those who can’t.

    Then there is the difference in credit rates. A loan for less than £5000 may incur interest
    at 21.9% upwards, whereas those who can afford a loan of £8000 may only pay 3.9% interest.

    With credit cards, interest rates charged depend heavily on a person’s credit rating. For poorer people this is often over 40%. Not to mention PayDay loans at truly astronomical interest rates. Or loans from credit sharks.

    For those with poor credit who can’t afford balance transfers, even for those who previously had a better rating the interest on a loan of £2500 on a credit card incurs £27 a month interest, so a monthly repayment of £50 only repays £23 on the amount outstanding.

    The situation is far worse for those with higher card rates of interest.

    This is all compounded by how much debt individuals have. People on £15,000 income
    typically have £25,000 debt. People on £25,000 income, £40,000 debt.

    While price rises and welfare cuts are obviously very significant, how much more so
    is how much debt, and what rate of interest is actually incurred.

    Which varies astronomically depending on which income group people are in.

    Therefore, cumulated effect of inflation and cuts/ freezes aside, the affect of Cost of Credit is a most vital factor that NEEDS taking into account.

    1. Mike Sivier Post author

      I have a very low income and no debt at all. Why are all these rich people pushing debt upwards? Can’t they just learn to live within their means?
      (Did you see what I did there, folks?)

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