Banner headlines about rising interest rates and soaring energy prices may have abated, but UK workers are still feeling that cost-of-living pinch.

Despite the Bank of England cutting rates for the second time this year, bringing them down to 4.75 per cent, prices went up by 2.3 per cent in the 12 months to October, which means inflation is back above the Bank’s target of 2 per cent.

And the Office for National Statistics (ONS) says that its key measure, the Consumer Prices Index (CPI) rose by 2.3 per cent in the year to October 2024, up from 1.7 per cent in the 12 months to September.

This is the highest rate for six months and was largely driven by the increased prices of gas and electricity after the energy cap went up at the start of October. Prices may be rising less quickly than they did last year, but they are still climbing, which is having an impact on consumer spending power and affordability.

5 jobs to apply for this week

• Salesforce Business Analyst, Loftware, United Kingdom
• Technology Tutor, BPP, London Area
• Software Engineer – Software Acquisition Management, BAE Systems, Bristol Area
• AI Scientist, ieso, Cambridge
• Data Engineer (Image Data), Xcede, London Area

Ideally in a situation like this, wages keep up with, or exceed inflation. In many cases this hasn’t happened, but a new report suggests 2025 may be more favourable for UK employees.

Last year, In 2023, UK inflation fell to 6.3 per cent, but the median pay increase budget was 5 per cent, putting workers at a disadvantage. Now, the gap between inflation and pay increases has narrowed, the data says, with 2024 data showing a median pay budget of 4 per cent, combined with the latest inflation figures at 1.7 per cent.

Based on this data the report suggests that higher than inflation wage rises may occur in 2025. Salary budgets are expected to be 3.5 per cent, with the inflation forecast at 2 per cent to 2.5 per cent.

Most workers will know that moving jobs is one of the quickest ways to earn more, fast. The average salary increase for job switchers is 14.8 per cent, with those who stay in a job for more than two years tending to make less than those who go elsewhere.

Learn the art of negotiation

If you like your current job, and would like to stay in it (albeit with a better salary), then you need to learn how to negotiate.

One company embracing the art of negotiation with gusto is the France-based AI photo editing startup, Photoroom.

Under the leadership of CEO Mathieu Rouif, employees receive training on salary offers, the negotiation process, and how to handle the overall discussion.

When Rouif first introduced the training programme three years ago, he recalls facing skepticism from fellow entrepreneurs who believed he was ‘shooting himself in the foot’.

Now though, Rouif says it’s good for business and in fact has strengthened trust and retention.

“You can train your people, and then they become better,” he says. “They ask for a better salary because they’re better and they’re more productive. You want your team to grow faster than the rest. You want them to grow as fast as the business.”

Advice includes learning the power of the anchoring bias, a psychological phenomenon whereby we rely heavily on the first piece of information we receive. So, if you lay a figure on the table at the outset of a salary discussion, you’re more likely to get what you ask for.

5 more tech roles to discover

• Director of AI, Harnham, London Area
• Data Engineer, Karndean Designflooring UK, Evesham
• DevOps Engineer, Stanford Black Limited, London Area
• AI Architect, Thrive IT Systems, London Area
• DevOps Engineer, Anson McCade, Greater Leeds Area

One of Rouif’s colleagues, Mikaila Read, global people ops, explains why this works.

“Doing so means you not only start to narrow the zone of potential agreement faster, but also increase your chances of benefiting from the anchoring effect – something else which challenges the common gut feeling that going first puts you at a disadvantage.

“In any successful negotiation, both sides should walk away feeling like they’ve ‘won’, but research does indicate those who made the first move typically ended up with better economic results than those who didn’t.”

Even if you’re not successful at getting your manager to agree to a raise, then you’ve still got plenty of options. You can ask for non-monetary compensation like more paid holidays, for example. You could also make a case for a more flexible working arrangement that works better for you and your life.

Or, you could consider making a career move. If that’s the case, then the Information Age Job Board should be your first port of call.

Want to make more money next year? Visit the Information Age Job Board today

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