There have been numerous reports this week on how the average wage has varied in the UK over the last 25 years. Let’s take a look at the following infographic:
The above infographic shows us how wage increases have varied by percentile of earners over the last 25 years. The graph essentially shows that top earners pay has proportionately increased more over the last quarter-century than lower earners. What make’s this statistic even more shocking is when we calculate the buffer between rich and poor:
|Year||Bottom 10%||Average||Top 10%|
The Rich’s pay has risen an average of 81% over the last 25 years whereas the poor has risen only 47%. Furthermore, the top 1% of earners have experience pay rises of over 117%!!! Is it any wonder that there is such a divide between the classes?
These statistics are a shocking revelation of what has gone wrong with the economy. The rich have been getting richer, while the poor have essentially been getting poorer. Senior executive’s salaries are at an all time high and the minimum wage is barely enough to survive on – prompting a revolution of the ‘living wage’ – a proposed salary of £7.45 p/h (£8.55 in London).
The thing that infuriates me the most is the companies which have identified these vulnerable group of individuals – those living from one paycheck to the next – and targeted them in offering payday loans or expensive debt consolidation plans. Instead of speaking to Citizen Advice Bureau (CAB) or seeking debt advice from payplan (an organisation funded by donations from the credit industry which offers free and impartial debt advice), people are drawn in by the catchy adverts and sign up to a new agreement which offers temporary relief… only to make their overall situations much, much worse.
Talk to Someone..
If you are reading this blog and can relate to the above situation; please, please don’t sign up for a temporary ‘payday’ loan. This will very likely only make your situation much worse in the long run. Debt management plans, IVAs (Individual Voluntary Agreements) and Trust Deeds (in Scotland) are all better options which are available. Furthermore, credit card companies, banks, utility providers, councils etc. all have systems in place to help those who are experiencing difficulties in paying bills. These companies are not telepathic – you need to let them know that you are going through a tough time. There is no need to feel embarrassed about taking this step – thousands of others are in the exact same situation as you are. Take action before action is taken upon you.
Avoid the Situation Completely
All of the above comes down to planning. If you are in-tune with your finances and plan ahead, you can be prepared for these unfortunate situations that could arise. While an emergency fund is a great start, the opposite end of the spectrum is being ignorantly unaware of where the cash for the next bill is coming from. Make a spread sheet, open your letters and speak to companies. Ask them for a discount / downgrade in service (TV, Phoneline, internet etc.) for a while. Gym’s can often let you freeze membership which may tide you through a tough time. All of these options come first. Take responsibility and stop blaming others for your misfortune. There are people and systems to help you, so please take advantage of them.
Do you have any family/friends/colleagues who are totally irresponsible with money? What advice (if any) have you offered?