I desperately need a pay rise but I’m too scared to ask for one

With the cost of living continuing to rise, if your wages are the same as a few years back, you’re effectively earning less than before.

John, from Nuneaton in Warwickshire, is feeling this pinch right now, working harder than ever before but still struggling to make ends meet.

There’s just one problem for the 42-year-old though, and it’s something many people will relate to – while he feels he deserves more cash, he’s concerned about ruffling feathers by asking for it.

So in this week’s Money Problem, personal finance journalist and consumer champion, Sarah Davidson, helps him come up with a plan.

The problem…

I’ve been working at the same company for the last 11 years and aside from the annual 1% to 2% inflation increases they give everyone, my pay has only gone up once; six years ago when I was promoted to a supervisor role. This was a welcome jump, taking my salary from just under £30,000 to £38,000 now, but my workload has been creeping up ever since, to the point I’m doing the jobs of multiple people.

It feels like the bosses know I want to help out and take advantage of the fact I’m more of a ‘get your head down and let your work speak for itself’ kind of guy. Now though, the price of everything has exploded to the point I’m barely getting by, and I know I need to start asking for what I’m worth.

My problem is that I also still really need this job – what if asking for a raise gets me labelled as a troublemaker or they decide to replace me someone less experienced (and therefore cheaper)? Other firms in the same industry pay someone on my level anywhere between £7,000 and £10,000 a year more, but this seems like a huge increase. So what should I be asking for and how do I go about it without shooting myself in the foot?

The advice…

John, you and every other poor sod in the UK at the moment. I really feel for all those who are scraping by on what, in theory, is a really decent salary.

From what you’ve said, I agree that you deserve a pay rise. You’ve done your homework and know your worth so there is absolutely no reason to be afraid to ask for it.

There is a difference between knowing and actually getting though – and, particularly at the moment, the world is not in a perfect place to pay staff more. There are two significant reasons for this, and I think it might help you to have some context to understand the reality facing your company’s bosses at the moment.

The first is that the amount of national insurance your company has to pay to employ you went up in April after the government announced a very weighty tax hike.

Companies are now paying 15% of your salary to the government – up from the 13.8% they had to contribute previously. At the same time, they’re now paying that national insurance for every pound you earn over £5,000 a year, compared to last year when the threshold was £9,100.

You’re on £38,000, meaning your employer will pay £4,949 to the taxman in national insurance over the 12 months from April this year, a whopping £961 more than last year. That’s on top of their contribution to your pension, with the minimum they have to put in by law equal to 3% of your salary – another £953 a year.

If you multiply this uplift across the whole of the company’s headcount, the dent that has made in profit is absolutely huge.

According to Payroll Plus, a Censuswide survey carried out in June found that a third of business owners are planning to cut jobs as a result of rising employer national insurance contributions, while almost one in three are considering freezing pay. Many have already lost their jobs since the changes were announced, with 164,000 payrolled employees ditched in July alone, according to HMRC figures.

The second reason is linked to the first, but in a broader sense – less money in the business bank has led to lower profits and spending cuts on things like marketing, advertising and anything else seen as an extra rather than a necessity.

The pain is palpable. The Bank of England calculates that the amount of stuff that £38,000 would have bought you in 2019, when you last had a pay rise, would now cost you £49,000. Even if you were paid this today, effectively that wouldn’t constitute a pay rise at all.

All this being said, the pressure on your employer shouldn’t be the guiding factor in whether or not you get a pay rise. This comes down to you.

Before you approach your boss, get your ducks in a row. You need to have written down a list of reasons they need to pay you what you deserve.

• Have you brought in any business to the firm in the 11 years you’ve been there? How much?
• What are your main achievements and, crucially, how has the company benefited from them?
• Provide evidence showing your role has expanded – whose responsibilities have you taken on and how much has the company saved as a result? Guesstimates will do.
• Are you more qualified now? Have you done any development courses? Demonstrate what that extra experience is worth. If you were to leave tomorrow, could they replace you with one person

Research the industry average for similar roles and provide evidence – Glassdoor is a good place to check this out, along with Michael Page and Indeed. Write it all down.

Look around for other jobs, talk to a recruiter and apply. You want to be in a strong position when you have this conversation and the best way to do that is to play hardball, politely. If you’ve got another job offer on the table with a better salary, tell them you want to stay and ask them to better that offer.

Be prepared to leave – sadly, moving to a new company is often the only way to get a proper rise. You never know, it might actually open up a new chapter in your life too.

Remember too that taking on new staff is an expensive business for a company. It takes around six months for someone to get to grips with a new job properly, time that costs productivity. Training new people is another cost. And then there is the hassle of recruiting someone who fits the culture and has the right skills with bosses having to add a significant workload to interview candidates.

Don’t underestimate yourself John because, ultimately, if you don’t ask, you won’t get. Be brave – the worst they can do is say no.

Sarah Davidson is an award-winning financial editor and head of research at WPB.

Got a money worry or dilemma? Email sarah.davidson@metro.co.uk