Rachel Gomez, Senior Economist at Pro Bono Economics, said:

“These latest figures show the national pay squeeze has now entered its 15th month, with regular earnings down 2.5% in real terms compared to this time last year. While the inflationary squeeze on wages persists, the most vulnerable households will continue to face serious financial challenges.

“The cost of living crisis means increasing numbers are turning to charities for vital support. But charities on the frontline are facing their own internal challenges. New Bank of England figures show that annual wage growth in the charity sector is seriously lagging the rate of growth in the private sector – up only 4.8% for charities, compared to 6.4% for businesses, as of December 2022.

“As demand for their help continues to spike, lagging pay may fuel burnout and recruitment difficulties for charities. The issue of pay in the sector is one that requires a move towards more sustainable funding for charities’ core costs over the long-term. In the short-term, charities will hope to see targeted support for the most vulnerable from the Chancellor in next month’s Budget."