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News: Cost of commuting continues to outstrip wage rises

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2nd Jan 2013
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Although real pay may finally have returned to positive growth at the end of last year, the cost of commuting is continuing to rise faster than either wages or inflation, resulting in an ongoing salary squeeze for many workers.

As a result, according to Hay Group’s PayNet UK Salary Tracker, train fare rises of 4.2% announced last month will put the average annual season ticket at 8% (£2,191) of the median UK salary of £26,082.   Meanwhile, despite the Chancellor George Osborne’s decision to delay the proposed fuel duty rise, staff who drive to work will spend on average 5% (£1,443) of their yearly pay on petrol. The proportion has increased as a result of petrol prices rising by a huge 44% since 2007 compared to wage increases of only 16% over the same time scale.   Adam Burden, a consultant at the Hay Group, said that employees were starting to become increasingly concerned about how much of their salary was going on travel.   “With real pay finally returning to positive growth and the jobs market beginning to pick up, organisations must take action to ensure that their top talent isn’t seduced by better offers elsewhere,” he said.   To this end, Burden advised employers to benchmark pay and benefits against that of their peers to ensure that they were being both fair and competitive with the wider market.   “But it isn’t all about pay,” he added. “There are affordable measures that organisations can take to help employees with the mounting ‘commuter crunch’, including flexible working, the opportunity to work from home or season ticket loans.”   The Salary Tracker report revealed that operative-level workers faced paying out 13% of their total median salary on a rail season ticket during 2013, rising to a huge 18% in London.   The figure fell to 7% among professionals whose median salary was £29,723, but many in this category chose to commute further to avoid the high cost of living and housing costs. A season ticket for people who commute for more than 50 minutes costs on average 12% of their wage, the study indicated.

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By Peter Cook
03rd Jan 2013 19:01

I found out by mistake that its cheaper to buy a ticket from Kent to Slough via London than it is to buy a one day travel card the other day.  I then checked what the fare would be to go from Kent to a station just across from a London terminus - even cheaper! 

So, if you are planning to travel to London and only have two tube stops to make in a given day, oddly enough it is cheaper to buy a ticket to go further.  Not many people know that!

 

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