Three weeks' extra pay in our pockets next year
The average worker will have up to three weeks’ more pay in their pocket by next Christmas than at the end of last year, IBEC has claimed.
That’s because of the combination of tax cuts in Budget 2015 and 2016, and pay rises, according to IBEC.
The lobby group claimed the majority of companies intend awarding wage increases next year, of around 2pc on average.
Increases in basic pay are most likely in companies in the high-tech sector and in larger companies, as 87pc of high-tech manufacturing firms quizzed by Ibec said they planned wage increases.
Maeve McElwee, Ibec’s head of industrial relations and HR, said most workers would feel the recovery in their pay packets next year.
“But we must not lose the hard-fought competitive gains of recent years. The focus must remain on job creation,” she said.
“Over the next year we have a chance to further cut unemployment and attract back emigrants, but we must not repeat past mistakes.
“If costs spiral and we lose our competitive edge we will pay for it in jobs.”
Ibec said that 71pc of companies surveyed planned to increase basic pay next year, with the average increase of about 2pc. Some 340 companies took part in the survey, which was carried out last month.
Ibec said the combination of pay rises and Budget tax cuts would see an average worker’s take-home income rise by more than 3pc from January, and result in a net take-home pay increase of about two weeks’ pay over next year.
As a result of changes to taxation in Budgets 2015 and 2016, as well as pay increases in private companies, the average worker will be better off by around three weeks pay by Christmas 2016, compared to Christmas 2014.
However, not every employee is enjoying pay increases, which should be noted, with some companies still not at the point of awarding pay hikes.
“Overall, we expect to see more increases in the tech and high-tech manufacturing sectors,” Ms McElwee said. “But we do expect in 2016 to see increases in areas where we haven’t seen them so much, with both distribution and services indicating higher rates of intentioned pay increases next year.”
However, she warned that among small companies with fewer than 50 employees, only 58pc indicated they would pay increases next year.