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Increased rail fares will take 8% of employees' salaries, according to Hay Group research

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Increased train fares look set to “swallow up” 8% of workers’ salaries, according to Hay Group’s latest PayNet UK Salary Tracker.

The average fare rise of 5.9% was announced in December - just below the Chancellor's cap of 6% - putting the average annual season ticket at £2,028, or 8% of the median UK salary of £25,176.

In some cases, today's fare hike could mean some commuters spending up to 21% of their annual salary on their journey to work.

Stuart McMillan, reward information consultant at Hay Group said: "As train fares continue to rise above inflation, and salary increases remain subdued, commuting costs are set to take up more of UK employees' pay packets.

"Employers need to be aware of this when considering reward packages, and consider benefits such as interest free season ticket loans and greater flexibility to work from home."

Hay Group's PayNet UK Salary Tracker analyses pay and salary movements across five different employee levels in over 600 organisations, representing more than 1 million employees. Season ticket prices are based on a sample of representative routes into eight major UK cities, based on typical short, medium and long journeys into each.

As ticket prices continue to eat into salaries, employers have been urged to consider ways to help employees beat the pinch - encouraging flexible working and considering creative benefits.

But only 42% currently offer their employees interest free season ticket loans. Only two thirds of these (64%) offer them to all UK staff, with most of the remainder (27%) doing so for London-based workers only.

Operative level workers face an average season ticket price costing 12% of annual salary - rising to 17% in London.

Those operatives commuting over 50 minutes into Birmingham will need to spend 21% of their salary on an annual season ticket.

The average for professional workers is lower, at 7%.But those at this level often choose to commute further, to avoid high living and housing costs. This means a season ticket cost of up to 9% of salary for commutes over 50 minutes.

Commuters in London spend the largest proportion of their salary on travel overall. For operative level workers, the average stands at 17%, rising to as much as 20% for journeys over 50 minutes.

As this does not take into account tube and bus fares, many commuters in the Capital will have to stretch even further to cover the cost of their journey to work.

 

From the sample, commuters in Cardiff spend the lowest proportion of their wages in the country on their commute, with short journeys representing less than 6 per cent of annual salary across all job levels. However, operative workers commuting for more than 30 minutes will still part with 10% of their salary for an annual season ticket.

In other cities, including Birmingham, Manchester and Bristol, average season ticket fares make up 13-14% of annual salary for operative level workers.

Season ticket prices in Scotland are slightly lower as a proportion of salaries. Operative level workers can expect to spend an average of 11-12% of their annual salary on commuting into Edinburgh or Glasgow.