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Responding to last week’s ONS figures, the CIPD believes that the ‘big pay squeeze’ is still to come as pay struggles to compete with rising prices.

The ONS report shows that unemployment is low (at 3.8%), however, candidates for jobs are in still short supply with many businesses struggling to fill roles.

Jonathan Boys, labour market economist for the CIPD, the professional body for HR and people development, commented, “Under such conditions we would usually expect inflation busting pay rises. However, pay is struggling to keep pace with rising prices. This means that regular pay is now about where it was in September 2020: the nation has effectively had a pay cut.

“A gap is also emerging between public sector and private sector pay. Regular pay (excluding bonuses) in the private sector grew at 4.7% compared to 1.7% in the public sector in the year to February 2022.

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“If a gap between private and public pay persists, a wedge will open up between the two and it could become increasingly hard for the public sector to compete for talent.

“The big pay squeeze is still in the pipeline. Employers have a big role to play in supporting their staff through this time. If the ability to award pay rises is limited, employers can look at the total employment offer.

“This includes designing jobs that include ample flexible working options. Financial wellbeing support can make a difference, as can revisiting the mix of benefits offered to make sure they work hard for employees, especially the lowest paid.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.

Why Thousands of Contractors Choose Dolan Accountancy

With over 25 years experience in contractor accountancy helping thousands of contractors, freelancers and the self employed, Dolan Accountancy has the specialist skills, reputation and credibility you can trust.

Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £125 + VAT. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795 100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours
  • Free use of Contractor Umbrella – With IR35 Legislation changes we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams
  • Free Access to FreeAgent – We offer all of our clients access to FreeAgent, free of charge
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few
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