The average UK household has seen levels of discretionary income diminish during 2010, according to the VocaLink Take Home Pay Index.
The index is at its lowest level ever recorded since its introduction in 2004, at just 0.5%. It has hovered below 2% for the past year and below 1% since February 2010.
The VocaLink services sub-index also fell in May, reflecting its lowest level on record. Services sector pay growth is now a full 1.8% lower than the same time last year and has been gradually decreasing since December 2009.
The VocaLink manufacturing sub-index, however, has reached its highest level since September 2009.
Marion King, chief executive officer at VocaLink, said: “Over the year to date, the average growth level of the VocaLink Take Home Pay Index has been just 0.8%, compared to 2.9% over the same period in 2009.
“The index shows real income growth remaining weak, particularly in the services sector which is using excess capacity to service initial increases in demand as the economy gradually recovers. The figures continue to point towards testing times throughout the rest of the year for the average UK household.”
Read more articles on pay