30/06/2017 15:31 BST

Public Sector Pay Cap Is Hitting Workers: Here Are 5 Ways They're Hurting

Public sector workers are the biggest users of payday loans.

PA Archive/PA Images
Public sector pay will hit a ten-year low if the Tory pay cap continues

Millions of public sector workers face a ruinous financial future as pressure on ever-dwindling wages forces them to use foodbanks and take out payday loans.

The defeat of a Labour amendment to end the freeze on public sector pay this week brought into fresh focus the plight of the 5.6m workers who have seen wages decline in real terms over five years.

The effect of the cap can be seen in other ways, too. From nurses using foodbanks, to a public sector rush for payday loans, here are five troubling stats that lift the lid on how the pay freeze is hitting everyday Britons.

1 Forced to use foodbanks

Leon Neal via Getty Images
Nurses have been forced to use foodbanks as a result of low pay

Nurses forced to use foodbanks to feed themselves and their families say they were unable to cope with the smallest of financial shocks due to low pay.

Nurses and some other NHS staff are bound by the 1% cap, which has been in place for five years. 

And with inflation now running as high as 2.7%, medics are struggling to cope with rising costs.

Donna, 44, from Northern Ireland, told HuffPost UK: “I was working full-time hours as a nurse when I had two strokes.

“I didn’t have sick pay because I was casual bank staff [called upon to fill gaps in the rosta]. So then I thought: ‘How am I going to do this?’ I went through with the social security but it takes six weeks to get that sorted.

“Then everything was running lower and lower and lower. I still had money from my last wage but it was trying to get the bills paid.

“Financially I couldn’t do a loan. I had seen someone had shared the advertisement of my local foodbank. It ended up being my only choice.”

The biggest-ever study of foodbanks revealed this week that 78% of users were severely food insecure - meaning they had skipped meals and gone without eating – sometimes for days at a time.

2 Forced to use payday loans

PA Archive/PA Images
New research has found that public sector workers are among those seeking a payday loan

New research has found that public sector workers account for 27% of those in employment seeking a payday loan, the highest number.

Nurses, teaching assistants and council staff were among the 8,000 people surveyed while browsing payday loans, according to comparison site

Most people seeking a payday loan said that the money would be used towards unexpected bills as they had insufficient savings.

Some 18% per cent said they needed additional funds to pay off another payday loan - hinting at a vicious cycle of debt.

Some payday loans currently available online quote an interest rate as high as 1,509% APR.

3 Living in fuel poverty

PA Wire/PA Images
Yet more people are officially in fuel poverty, new figures show, including some public sector workers

Some 11% of households in England - around 2.5 million homes - were in fuel poverty in 2015, a slight rise on the previous year, official statistics showed last week.

The gap between the bills that fuel-poor households faced and what they could afford to pay was more than £350, but had fallen since the previous year, the statistics showed. 

Levels of fuel poverty, measured as facing high bills and low incomes, were highest in the private rented sector where more than a fifth (21.3%) of households faced an average shortfall of £410 to pay their bills.

Almost a quarter (23.6%) of single parents were in fuel poverty, making them the type of household most likely to be facing difficulties.

A spokesman for the Department for Business, Energy and Industrial Strategy said: “The Government is committed to tackling fuel poverty and support worth £770 million is helping to decrease the fuel poverty gap, as these figures show.”

4 Taking on more debt

PA Wire/PA Images
Consumer credit is booming at levels not seen since 2005

It’s not just payday, short-term, loans which public sector staff are relying upon by hard-up public sector staff. 

Consumer credit, including longer-term loans, credit and store cards, is booming - reaching levels not seen since 2005.

The Bank of England has said incentives and interest-free periods were contributing to the trend.

Worryingly, some lenders were “forgetting the lessons” learned during the crippling financial crash, Governor Mark Carney said.

“Consumer credit growth has far outpaced that of household income over the past year,” he said last week.

5 All as wages dwindle further 

PA Wire/PA Images
Public sector pay is due to hit a ten-year low in 2020 if the freeze continues

Average public sector wages will continue fall until they reach a perilous 10-year low by 2020, analysis has shown.

The Resolution Foundation said the situation won’t improve for hard-up workers bound by the one percent cap in pay rises unless action is taken.

On current trends, the average pay of public sector workers will be £1,700 lower in 2020 than its peak in 2010, it said.

Another study by the TUC found that midwives, teachers and social workers would see their real pay drop by more than £3,000 by 2020 if the government sticks to plans to limit salary increases to 1% a year.

[NOW READ: 5 Everyday Heroes Hit By The Tory Public Sector Pay Cap]