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Your Money: Switching jobs may boost your pay but be aware of what you’re giving up

Should I stay or should I go now?
Should I stay or should I go now?

Official figures show UK pay growth in April was 6.6% higher for job movers than for those who stayed put.

Job changers who switched industries, occupations, or region at the same time boosted their pay even more.

But those aged 65 and over saw lower earnings growth than the year before, the Office for National Statistics data revealed.

The most recent labour market figures showed a record of 994,000 job moves between January and March this year, triggered by resignations rather than people being let go.

Part of this is the annual merry-go-round, as people decide to make a new start for the new year. However, part is also down to pay.

New job, new terms – look at the pros and cons.

With inflation running high and some employers still holding tight to the purse strings, many people are realising they can boost their pay by changing jobs.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “The grass is slightly greener on the other side of the fence but the ground may be less stable.

“Switching jobs will boost your pay by an average of 6.6%, and switching industries, occupations or regions at the same time can have an even more dramatic effect.

“But before you jump the fence, you need to know what you’re giving up.”

Benefits of moving

Ms Coles said: “Moving jobs tends to boost pay, but in some sectors the benefit of switching is even greater.

“Those within arts, entertainment and recreation who moved saw average pay growth of 21%, and those within the information and communications sector saw it grow 20% – for stayers in both industries, pay grew 2%.

“If your job hunt takes you into a new industry, it can have an even bigger impact.”

Ms Coles added: “While pay usually gets a boost from job moves, hourly earnings are actually an average of 17% higher among those who stay put.

“This owes a great deal to the fact that younger people tend to move jobs more – in the year to April around 14% of those aged 16-24 changed jobs, compared to 5% of those aged 35-49.

“Those who stay tend to be older, more experienced and more senior, on average.”

What you give up

Ms Coles said: “Your pay may rise when you change employers, but it’s important not to lose sight of what you might be giving up.

“While you get some rights from day one of a new job, for others you need to have worked there for anything up to two years.

“When you start a new role, you may be on a probationary period and your employer can impose specific rules. In some cases, there may be restricted rights to holiday.

The grass is slightly greener on the other side of the fence but the ground may be less stable.

Sarah Coles, Hargreaves Lansdown.

“If you are starting a family, some of your rights will depend on you working there for 26 weeks by the end of the 15th week before the due date.

“If you move within this time, you lose your statutory right to maternity and paternity pay, shared parental leave and paternity leave.”

After you have worked anywhere for a year you gain the right to take a total of 18 weeks’ unpaid parental leave for each child under the age of 18.

But other rights don’t kick in until you have been employed for two years.

These include being able to go to an employment tribunal if you have been unfairly dismissed, and your eligibility for redundancy pay.

It’s essential for potential movers to look at the whole package, including any insurance cover, holiday and the pension, Ms Coles said.

Helen Morrissey, senior pensions and retirement analyst, Hargreaves Lansdown, added: “The concept of a job for life is well and truly gone and the average worker will change jobs multiple times during their career.

“This can potentially have a huge impact on pension saving if you do not keep up your levels of contributions.

“In addition, regular job moves increase the likelihood you will lose track of pensions from previous employers.”

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