Traditionally, if you overspent you could always rely on an annual pay rise to give you a bit of a boost. But now debt management is becoming even harder as the annual pay rise is reportedly in decline. As police and teachers threaten to strike over their pay deals, the Chartered Institute of Personnel and Development has said that only a third of employees were confident in their pay rise.

Debt management – pay confusion

Debt management strategies are confused and ineffective as the CIPD say more employees are unsure about how future pay rises are calculated. The misplaced confidence that you are going to get a significant annual pay rise could encourage you to spend more than you actually have. If you were hoping to pay off small debts, or climb out of your overdraft thanks to your annual pay rise, you could be in for a shock – nearly half of companies it's reported, no longer offer across-the board annually pay rises or raise wages to cover the increase in the cost of living.

Confused over finances

With utility bills climbing, an increase in council tax and a 15% rise in British Gas services, as well as the impact of increased mortgage repayments and the percentage rise in the cost of food, debt management and budgeting need careful consideration. Especially considering the fact many of us are not experiencing a pay rise or having the increased cost of living factored into our salaries. The research by the CIPD said pay can leave many employees ‘demotivated' ‘confused' and ‘in the dark'.

Debt management crucial

This confusion can be debilitating when it comes to debt management and personal finance management. A CIPD spokesman told the BBC: "The decline in the yearly traditional pay rise seems to be spreading throughout employment sectors." Pay deals are not as transparent as they once were. And debt is a major issue in 2008 as the global economy faces potential meltdown - debt management has never been so crucial. As well as the decline of the pay rise, over half of companies in the manufacturing and production sector have closed pension schemes. For those seeking debt management strategies and who need to save for their future, the news is bleak.

Debt Management Solutions with Varden Nuttall

Varden Nuttall has been established for over 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an Individual Voluntary Arrangement (IVA). Employing 90 people, including trained and skilled IVA administrators, we are one of the largest IVA companies in the UK and handle over 3% of all IVA applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0800 031 9802 or fill in our online enquiry form.