Time to ask for a pay rise
A higher salary is the best way to combat the cost of living crisis
As the cost of living bites, many of us are looking for ways to make cutbacks. But is that the most effective way to balance your household budget? “Forget buying Tesco value baked beans, putting on an extra jumper or demanding government handouts – the single best way to combat rises in the cost of living is to expand your income,” says James Coney in The Sunday Times. “In short, go and get a pay rise.”
Most people are far more inclined to curb their spending than try to increase their income, according to a recent survey by Ipsos Mori. When asked what they would do if price rises meant they could no longer afford their lifestyle 49% said they would cut back on heating and electricity and 37% were prepared to give up their holidays, yet only 5% would ask for a pay rise. But if you’re willing to buck the trend, improve your chance of success by laying the ground carefully. Simply asking for more money is unlikely to be successful. Ask your manager for a meeting to discuss your salary and give them some notice. The element of surprise is not useful in these situations. Then get prepared.
Make your case for a raise
Start off by finding out what most people in your job are being paid. There are plenty of online salary checkers that tell you the average pay for your job title. Alongside this, be ready to show why you deserve more money. “Your fundamental objective is to prove you’re an asset to the business, so structure your case around this idea,” says Geoff Fawcett, director of recruitment firm Hays. Make a note of what you have achieved and how you have contributed to your team. Back up your argument with financial facts. How have you helped bring more money into the business, or made savings?
Don’t be derailed by the offer of a one-off bonus rather than a pay rise. Employers may argue that current soaring inflation rates are temporary, so you only need a one-time bump in your income. But there are two problems with this. “Often bonuses are not pensionable (so your employer gets away without making an additional contribution to your retirement), but also [while] inflation may subside, the price rises that it created will persist. So, your pay will lag them forever,” says Coney.
If you can’t agree a pay rise, see if there are ways you can boost your income by reducing how much tax you pay. Does your company offer any salary sacrifice schemes you could utilise? This could be a season ticket loan, a company car or health insurance. Are you using the marriage allowance to reduce your household’s income tax bill? And consider looking for a new job. With plenty of vacancies and a shortage of workers, it’s a good time to look for a new role. Workers who moved jobs are getting a 15% pay rise on average, says recruitment firm Robert Walters.