Pay freezes to make a comeback for 2012

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More than one in 10 employers say they do not expect to increase staff wages next year, compared to 9pc this year, the statistics from pay consultancy XpertHR show. For thousands of employees, a pay freeze will effectively mean a pay “cut” when the rising cost of living is taken into account.

Even the typical pay rise for workers who do get an increase in 2012 is likely to be stuck at around the 2.5pc mark – way below inflation which hit 5.2pc last month on the Consumer Prices Index (CPI), the figures show.

The news is worrying for the millions of private sector workers already squeezed by years of pay freezes, pay cuts and below-inflation rises depending on which sector they work in. Employers are reluctant to award pay rises in the current economic climate, with many preferring to hoard cash rather than reward staff extra money.

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