Steadying the ship - a perilous voyage across the financial middle

beanielou

When I worked for Btee it was 2 a year. Increments on pay scale til at top & pay award.

edinburgher

I am exhausted but pleased with myself after a 40-minute discussion with staff from a regulator where I did almost all of the talking 😊 Tomorrow should be a little more relaxed!

Having done the month-end figures early, we are at +£2,000 for the month. This feels like a real achievement in a month in which we invested c. £950 but our investments shrank by nearly £800! I wasn't able to fully stem the bleeding as regards strict (i.e. portable) net worth, but I can cope with the -£454 figure. Things can only get better (as they used to say in the 90s).

Baileys_Babe

I now have an ear worm 😄

Cheery_Daff

I've only even known the academic system, broadly similar to the civil service one. We are on a nationally negotiated salary scale, everyone increases an increment each year until they hit the top of their band, and there's an increase for the whole scale once a year too. I think I've got two more years before I'm at the top of my band (or maybe just one??) Then I stay there until promoted (if that ever happens) - will still get the overall percentage pay rise the same as everyone else though. Although if I am ever promoted, at that point I'll be sufficiently senior that, after a couple of fixed increments, it starts getting a little like the wild West in terms of negotiations i think! Who knows if we'll ever get there though 😂

rtandon27

https://forums.moneysavingexpert.com/discussion/comment/82086898#Comment_82086898

Yes - ours works in a similar way - but you explained it much more succinctly! - lol - the caveat for ours is that we are not permitted to unionize (yes that is a real thing) - we are however able to bring our employers to UK court over employment issues! - decent salaries and fabulous benifts but extremely stressful in many ways and very incompetant at people management which is abhorant in my book!

Suffolk_lass

Whereas now, we pensioners get the Triple lock applied to state pensions (wages higher than both CPI in September and 2.5% this year) and our occupational pensions increase in May by CPI the previous September.

I don't really agree with percentage increases as it makes the disparity between lower paid and higher paid greater over time. I liked the bottom three grades getting a minimum capital uplift each year (as long as it is over the miserable £500 it was last time) plus the percentage everyone else was getting.

I noticed lots of moaning in the press about people stopping work earlier than their retirement age. Any public servant is going to know they are better off with their pension pot increasing through indexation rather than pay rises (since 2010) so stopping as soon as you can "mind the gap" from savings is merely prudent!

edinburgher

You managed to fit a lot into one post there, @Suffolk_lass !

Thinking about your points back to front:

1) I never thought about early retirement from the public sector like that. I suppose it makes perfect sense but it only really works when you're very close to the end of your career. Otherwise, the loss of one more year (OMY) is a bit salary increase "tail wagging the dog"?

2) I am generally in favour of progressive pay settlements but I think there is a limit to what can be achieved. Everyone can't be paid the same money when some jobs are objectively more challenging than others, but some jobs that are challenging in different ways (i.e. dirty, unsocial hours, repetitive) don't get the recognition they deserve.

I think I'm going to agree with your general argument but respectfully disagree with how it is achieved/how quickly it is achieved. A flat settlement is already more advantageous to someone on a lower wage (£1,000 is 4% for someone on £25,000, but 2% for someone on £50,000). An uplift + the same increase as others are getting would seem to be excessive. Your person on £25,000 might get 3x the increase of the person on £50,000 (made up numbers), whereas even the flat settlement is double the increase. Our increases have varied over the last handful of years (a couple of flat settlements + a few % increases). I think that has just about worked in terms of lifting wages for the lowest paid while not creating too many disincentives to seek promotion etc.

I have spoken before about how everyone understands "grades" where I work. The design of the pay and grading structure was such that each subsequent promotion basically meant 25% extra wages after you had earned all of your increments. Flat settlements knock that out of kilter, meaning that there is very little incentive for some bright people to push themselves from (for example), a senior officer post to a management role. This means that you have "clumps" of people who are basically overqualified but stay put for decades (already a "problem" for the public sector).

This is moreso the case for those of us who are parents, as Child Benefit starts to disappear if you earn more than £60k + your pension contributions. Yes, I know, tiny violins and all that, but it does affect decisions. I have a peer who lives in a single-income household. Sure, they earn their £65k or whatever, but that supports a family of 4 + a dog. It doesn't go very far, a modest life in a low-cost area with a few treats and a holiday every couple of years. If they go for promotion they will then lose c. £2,400/year in CB because everything seems to be a cliff edge these days. So their first increment is now worth 1/2 of what is should be in real terms, not even thinking about tax!

3) I'm not sure I have a strong position on whether the SP should be uprated by wages but I am not confident that this would be fair to all the people in work who aren't getting the average during their working lives and any increases they do get? I know that whenever we discuss wage increases, there are usually a wee handful of folk who tell me that they usually get very little. I do feel on firmer ground, however, by saying that I think SP lacks in generosity more generally, it is a pittance in the grand scheme of things. I'm not one of those "it'll disappear by the time I'm 60" folk, but I do expect bold (mandatory) changes to non-SP pension provision in the medium-long term.

I approach all of this from a position of recognising my privilege and that these are "first world problems" (also a problematic expression). Fiscal drag etc. means that more and more people who were once in the middle are considered to be financially closer to the top, so the sorts of examples I bandy around are hardly unusual, particularly in the South.

All interesting, thank you!

edinburgher

On a totally unrelated note, I am so glad (both financially and in terms of being a parent) that July is over 🤣

beanielou

https://forums.moneysavingexpert.com/discussion/comment/82087424#Comment_82087424

Says every parent in Scotland.

Staffordia

The part of the CS I was in did away with annual increments years ago, and I had to settle for either no increase or 0.5%. When I took early retirement it was eye opening to see what my final salary should have been if we had just received inflation increases.