Jump to content
House Price Crash Forum
interestrateripoff

Take-Home Pay Down 5% In Real Terms Since 2009, Says Study

Recommended Posts

http://news.bbc.co.uk/panorama/hi/front_page/newsid_9436000/9436026.stm

The average employee takes home £1,088 a year less than two years ago when the sum is adjusted for inflation, research commissioned by BBC Panorama suggests.

The sharp drop, in real terms, highlights the effect of stagnant wages and above-target inflation on incomes.

The average British worker earned £20,149 at the start of 2011 - a real terms fall of 5% from what they were earning in the middle of the recession.

The research was based on actual salaries paid into bank accounts.

It was carried out by the Centre for Economics and Business Studies and based on data on salaries from the payment processor, Vocalink, which looks after more than 90% of deposits into employees' bank accounts.

If only these people where bankers. I bet they haven't seen a 5% fall in income.

So the average British worker sees pay shrink by 5% and gets to fund a bailout for our bankers. Bargain. We've never had it so good.

Share this post


Link to post
Share on other sites

House prices deflating, wages deflating.............................

Perhaps Posy at the BoE is right. The economic black holes have powerful gravitational force that no amount of QE can oppose.

Share this post


Link to post
Share on other sites

BBC spins the story out so it appears to be all the fault of the housing market:

For now Mr Atkinson is holding out hope for an upturn in the construction market. But with real incomes falling and first-time buyers staying away, he may have a long time to wait.

Is that Mr Atkinson's opinion or the BBC's opinion? There are no quotes around the comment.

They also show a graph at the bottom of the article showing percentage of household's struggling to keep up with mortgage payments and what may happen if interest rates increase.

Share this post


Link to post
Share on other sites

If only these people where bankers. I bet they haven't seen a 5% fall in income.

So the average British worker sees pay shrink by 5% and gets to fund a bailout for our bankers. Bargain. We've never had it so good.

But of course, any union bargaining for a pay rise is Teh Evil, and daring to suggest that importing foreign labour en masse to keep wages down across the board could be slowed a little is Teh Racist.

Share this post


Link to post
Share on other sites

But of course, any union bargaining for a pay rise is Teh Evil, and daring to suggest that importing foreign labour en masse to keep wages down across the board could be slowed a little is Teh Racist.

The right are very good at adopting leftie tactics went it suits.

But then markets don't give a frig about political leaning, pity governments equally don't give a frig about markets either.

Share this post


Link to post
Share on other sites

The right are very good at adopting leftie tactics went it suits.

But then markets don't give a frig about political leaning, pity governments equally don't give a frig about markets either.

Not sure about that. The markets are (were?) ultimately the product of a lot of people interacting, and at a guess I'd say that a strong majority of those have right wing leanings. Indeed, you could say that the reason the whole caboodle ran off the edge of a cliff was because a majority of participants had ideologically convinced themselves that markets could not fail because they were totally rational...

Share this post


Link to post
Share on other sites

The situation is dire. Falling real wages means recession. There two ways out: increase wages, or reduce inflation. Which option is the goverment taking? Neither! My thoughts here...

One of the Office of Budget Responsibility forecasts George Osborne gave in his budget last week is that wage growth this year is expected to be 2.0%, and next year 2.2%.

So we currently have RPI inflation running at 5.5% and wages growing at 2%.

This means that on the year spending power will decline by 3.5%.

Then next year spending power will be down by almost 7%, unless inflation is controlled.

Then 10.5%.

And so on.

And as each business receives less revenue so its employees in turn spend less and there's a downward spiral. More

Share this post


Link to post
Share on other sites

There is a BBC Panorama on this on tonight with the guy who used to do Wake Up to Money on Fivelive. They had bits of it on Fivelive this morning and some of it is about people behind on mortgages.

Share this post


Link to post
Share on other sites

And yet there are those who still maintain that we need higher interest rates to see an HPC :rolleyes:

For the overleveraged the party's over, whichever way you cut it.

Share this post


Link to post
Share on other sites

If average wages around £20k and average house price is around £160k. This puts price to income ratio more like 8x. So if wages fallen by £1k, then that should slice £8k off average house price. It also does not consider reduction in benefits such as child tax credits, and the increase tax hike.

Share this post


Link to post
Share on other sites

Plus the money we have buys less because prices are rising to pay for excessive pay rises at the top. Bankers are only part of it and being used as a smokescreen to concentrate attention from other businesses.

We are all in it together - NOT

Remuneration increases listed in their company annual reports for 2009 and 2010 just for firms in mentioned on threads on here

Next

S A Wolfson £831k to £1.7m (+109%)

C E Angelides £585k to £980k (+67%)

D W Keens £560k to £936k (+67%)

A J Varley £423k to £789k (+86%)

http://www.nextplc.co.uk/nextplc/financialinfo/reportsresults/2009/jan10/jan10-c.pdf

HMV

Simon Fox £579k to £874k (+51%)

Neil Bright £349k to £559k (+60%)

Gerry Johnson £312k to £494k (+58%)

Robert Swannell £50k to £200k (+300%)

http://2010hmvgroup.ry.com/Accounts_and_Downloads/PDFs/directors_rem_report.pdf

Kesa

Thierry Falque-Pierrotin 2009 to 2010

£521,838 to £2,105,430

http://kesaelectricals.com/results-and-reports#117|tab=136

Halfords 2009 to 2010

David Wild £799,000 to £1,134,000 (+42%)

Nick Wharton £384,000 to £555,000 (+44%)

Paul McClenaghan £383,000 to £540,000 (+41%)

http://www.investis.com/hal/ir/fininfo/reports/rep2010/ar2010/ar2010.pdf

JJB Sports Total Director Rumeneration

2010 £2,593,000

2009 £1,291,000

"The Committee determined that the targets had all been met and therefore the Executive Directors were each

entitled to a bonus of 100% of annual basic salary."

http://www.jjbcorporate.co.uk/pdf/reports/2010%20-%20Annual%20Report.pdf

Sainsburys 2009 to 2010

Justin King £2,048,000 to £3,348,000 (+63%)

Mike Coupe £937,000 to £1,407,000 (+50%)

Darren Shapland £967,000 to £1,542,000 (59%)

http://www.j-sainsbury.co.uk/ar10/downloads/pdf/Sainsburys_AR10_Full.pdf

South West Water

Directors emoluments

2010 £1,394,000

2009 £1,183,000

Up 17.8% in a year

2006 £606,000

Up 130% since then

http://www.southwestwater.co.uk/media/pdf/3/g/SWW_AR_FIN_STATEMENTS_2010_Cover.pdf

http://www.southwestwater.co.uk/media/pdf/p/7/31march2006finalAccountsV3_plusFrontCover_1.pdf

Morrisons

Increase the maximum annual bonus potential for Executive Directors from 100% of base

salary to 200% of base salary for 2010/11.

Increase the level of Long Term Incentive Plan (LTIP) awards for Executive Directors

(with the exception of the incoming Chief Executive) for 2010/11 from 200% of salary to

240% of salary. The incoming Chief Executive will receive an LTIP award equal to 275% of salary.

These award levels are within the individual limit of 300% of salary contained in the LTIP rules.

The Committee, therefore, very quickly took certain steps to this end and agreed to an additional LTIP award of

100% of salary to these two individuals, in addition to the 200% of salary award already received

in 2009/10

http://www.morrisons.co.uk/Global/Images/Corporate/Annual%20Report/Morrisons_AnRep10.pdf

Aviva

Andrew Moss, Group Chief Executive

Basic Salary £925,000

ABP £1,029,294 (111.3% of basic salary)

OATTV Plan £501,443

LTIP – Face Value of grant £1,618,750

ACAP £462,500

http://www.aviva.com/library/reports/2009ar/downloads/directors_remuneration_report.pdf

Tesco

Terry Leahy £9.1m to £15.6m

http://www.thisismoney.co.uk/news/article.html?in_article_id=517324&in_page_id=2

annual bonus payouts ranged from 60% to 90% of maximum.

The maximum potential bonus was 250% of salary for the Group

CEO , 300% of salary for the US CEO and 200% of salary for other

Executive Directors;

• long-term incentive payout was 90% of a potential maximum of

100% of salary;

• no material changes to policy, remuneration mix or scale of incentives;

• deferred awards, already earned from prior years, representing

4.6 million shares became available to Directors;

http://www.tescoplc.com/annualreport09/downloads/

M&S

Let’s take it one helping at a time. In year one Bolland will receive £975,000 basic. He’s entitled to the company’s maximum 250pc bonus, worth up to £2.44m, if he outperforms the consensus of analysts’ expectations. He will then receive an “exceptional” award of shares under the company’s Performance Share Plan worth 400pc of salary, or £3.9m. He won’t be able to get his hands on this last bit of his £7.3m year-one package until 2013.

But this level of compensation compares more than favourably with Sir Stuart Roses’s starting package in 2004/05 when he was parachuted in on a starting salary of £850,000 plus signing-on fee of £1.25m to defend the company from Sir Philip Green’s takeover bid. Even doing two jobs as executive chairman, Sir Stuart is currently paid a £1.13m salary.

But M&S is also picking up the tab to compensate Bolland for leaving his previous pay pile at Morrisons. This adds up to £7.5m. The ingredients of this little dish are £1.6m in cash and £1m in shares for his 2010 awards, plus another £4.9m granted as he walks through the M&S door for Morrisons shares not vesting until 2011 and 2012.

http://www.telegraph.co.uk/finance/comment/damianreece/7131563/Marc-Bollands-MandS-pay-package-is-too-rich-to-swallow.html

Reckitt Benckiser

Pass the Nurofen please. The scale of Bart Becht's pay packet at Reckitt Benckiser is so shocking it may be necessary to take a lie-down and a couple of his company's bestselling painkillers. Ninety million pounds. For one man, in one year, from a company he does not own. That's £1.7m a week. More than quarter of a million pounds every day. Nearly double the previous FTSE 100 pay record. We've got used to Becht topping the pay charts every year, with huge sums like £36m and £22m. But £90m?

Last week CBI boss Richard Lambert warned that boardroom pay was getting so out of kilter with average wages that bosses risked being regarded as "aliens". Well Bart Becht is the Emperor Dalek.

Chief executive pay, said Lambert, had risen from 47 times average wages to 81 times in the last 10 years. Becht, however, received the same pay as 3,000 of Reckitt Benckiser's staff last year – or 10% of the group's workforce. His rewards have spiralled tenfold in a decade and he has now banked more than £200m from this business since 2005.

Becht's pay outstrips even the banker brigade, who have been so castigated in recent years. At least bankers do something that is hard to get your head around. Selling Cillit Bang is not rocket science. Reckitt Benckiser, in Becht's own words, sells "very stupid products".

http://www.guardian.co.uk/business/2010/apr/07/viewpoint-bart-becht

Paul Moody CEO of Britvic

2010 Basic Salary £490k Bonus £638k (130%!!) plus £22k in taxable benefits giving a total of £1,150,000

2009 he got £997,000 So a 15% increase.

http://ir.britvic.com/~/media/Files/B/Britvic-IR/Attachments/pdf/presentation/2010/reports/ar_2010_final.pdf

In 2006 he got £366,000 (319%?)

http://ir.britvic.com/~/media/Files/B/Britvic-IR/Attachments/pdf/presentation/2006/reports/Annual%20Report%202006.pdf

Share this post


Link to post
Share on other sites

It says salaries paid into bank, therefore net salaries

£20k after tax looks to be around £26k before tax, still well out of kilter with house prices mind

Share this post


Link to post
Share on other sites

It says salaries paid into bank, therefore net salaries

£20k after tax looks to be around £26k before tax, still well out of kilter with house prices mind

So ABP's, OATTV's, LTIP's, ACAP's, bonuses and share option sales, etc don't count?

The basic salary of FTSE bosses is often a fraction of their overall earnings.

Next has said that clothing prices could rise by up to 10% for autumn 11 and that businesses must adapt to a fundamentally changed retail landscape dominated by inflation and lower consumer expenditure.

http://www.drapersonline.com/multiples/womenswear/next-autumn-11-price-rises-to-hit-10/5023838.article

Share this post


Link to post
Share on other sites

If average wages around £20k and average house price is around £160k. This puts price to income ratio more like 8x. So if wages fallen by £1k, then that should slice £8k off average house price. It also does not consider reduction in benefits such as child tax credits, and the increase tax hike.

the 20k figure is net of taxes, NI, pensions and potentially a few other things.

Would work out to around 27-28k gross probably.

Share this post


Link to post
Share on other sites

the 20k figure is net of taxes, NI, pensions and potentially a few other things.

Would work out to around 27-28k gross probably.

I bet you £20k it doesn't include any of the tax credit / child benefit handouts

Share this post


Link to post
Share on other sites

It sounds like an interesting programme, but what are the chances the under-pinning, unspoken and unchallenged belief is that falling house prices are a bad thing and must be stopped to aid the 'recovery'? Once you recognise that in an argument you can't take the conclusions seriously. How I would love to be proved wrong, but this is the BBC.

Share this post


Link to post
Share on other sites

I can definitely feel the difference in my paycheck. I'm sitting on the fence from a "Did I simply have it too good before" and "Is the company f*cking me over?". I suspect it's a mix.

And the sodding politicos in charge. Starting to get wound up!

Share this post


Link to post
Share on other sites

If average wages around £20k and average house price is around £160k. This puts price to income ratio more like 8x. So if wages fallen by £1k, then that should slice £8k off average house price. It also does not consider reduction in benefits such as child tax credits, and the increase tax hike.

Traditionally the house price to income ratio has been against the pre-taxed income level.

Of course what is more relevant, is income after taxes and benefits have been applied.

Share this post


Link to post
Share on other sites

Black Economy :ph34r:

Oh yes, and that will get bigger.

The only figure that matters with regards to income, is the post tax and benefits figure. What we have seen over the past couple of years is wages stagnate, or at least the visibile wages of people. At the same time, taxes and prices have gone up, people are noticing and feeling angry. Most on the average wages they mention here, are not able to buy a home unless there is an alternative source of funds.

Those on benefits though, are relatively doing very well. Their income isnt taxed, and they get an increase in line with inflation. HB moves up in line with prices. I ought to write a rant about this, actually I will.

Because you get a positive feedback effect with housing benefit, the thing can run out of control, and is running out of control. By which I mean payment of the benefit, drives up prices, which in turn drives up the benefit completing the loop. Only with HB it is worse than that, because it causes people to have to turn to HB to compete in the housing market, which drives up prices even more. Ian Duncan Smith is probably sitting in his office right now, knowing that the only way out of this mess is to either drop HB altogether, or just make a fixed payment for every adult claiming it, and not link increases to inflation or rental increases, something which you need to do to stop the feedback effect. Cos if you dont stop the feedback, eventually HB will blow the deficit up to a Sovereign default. Meanwhile Ian Duncan Smith would like to tell someone about the problem and get it fixed, only he cant do that because he will be sacked.

OK, that rant is out of the way.

But with benefits going up relative to wages, what can you do to protect yourself? Well you either go to benefits yourself, perhaps claiming whilst working, or just go into the Black Market. It is either that or live like a monk or a nun.

And this makes no sense from the national perspective. Taxes and benefits should be set at a level where those working are not deterred from working in the white taxed economy. Benefits and public sector salaries should only be paid from the tax that is raised to allow this. Instead we are putting the cart before the horse, working out what money is needed to pay for public sector fat and house price inflating HB etc ad infinitum, and then taxing the guts out of the private sector to raise the funds necessary to pay it, only as we see, even that isnt enough.

Net result, implosion of the taxed private sector as people move elsewhere to sustain themselves economically.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.