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Wage Calculator: How Much Worse Are You After Inflation?

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With CPI hitting 9% in April, you can use our calculator to calculate how much you would need to earn now to not be poorer than last year.

The UK is facing an unprecedented cost of living crisis, with inflation hitting a record high of 9% in April.

This means the prices of goods and services a typical consumer might buy were, on average, 9% higher than they were in April 2021 – and if salaries don’t match, workers will get less bang for their buck.

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An analysis of Pay as You Earn (PAYE) data from NationalWorld’s Office for National Statistics (ONS) has revealed that workers across the UK suffered a real pay cut this April compared to last year, with earnings thereafter adjustment to inflation was about 3% lower on average.

In some parts of the country, employees have had to pay up to £150 a month out of pocket, with the average loss being £66. The figures exclude the self-employed and include bonuses and regular salaries.

But how much would you have to earn now compared to last year to not have to accept a drop in salary?

Our real wages calculator below shows you how much your net pay has had to increase to keep up with inflation – and how much out of pocket you are when your wages stand still.

What is inflation?

Inflation is calculated monthly by the ONS.

The most important metric – and the one that has reached 9%, its highest rate since current records began in 1989 – is the consumer price index (CPI).

If a pint of milk was £1 last April but £1.05 this April, milk inflation would be 5%.

The ONS measures price increases across a vast “basket” of goods and services to determine the overall pace of inflation, but prioritizes some items in the basket higher or lower depending on how important they are or how much we spend on them.

For example, a 10% increase in the price of petrol would have a much larger impact on the price of the entire basket than a 10% increase in tea bags, since consumers typically spend more on petrol than on tea.

However, calculations by the Institute for Fiscal Studies (IFS) show that the poorest households – who spend more of their income on food and energy and less on non-essential items – faced inflation of up to 10.9% in April.

Inflation for the wealthiest households meanwhile stood at 7.9%, the IFS said.

How big was your pay cut in real terms?

With inflation at 9%, a worker who took home £1,000 a month after taxes and other deductions last April would have had to earn £1,089.92 in their pay package this April for their pay to remain stable.

Our salary calculator below shows you how much you need to take home now compared to last year if you want your salary to keep up with inflation.

Enter what you earned after taxes and deductions in April last year to find the equivalent figure in April 2022 prices.

The calculator doesn’t take Social Security into account, and many people’s contributions have increased over the past month.

Which parts of the UK are most affected?

Scotland and Wales are the UK regions where workers took the worst wage cuts last year, with wages falling 4.4% in real terms.

In some areas, workers have suffered pay cuts of more than 6%.

https://www.nationalworld.com/lifestyle/money/salary-calculator-uk-inflation-cpi-real-terms-pay-3701566 Wage Calculator: How Much Worse Are You After Inflation?

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