Incomes fall 3.5% for UK households

| November 23, 2011
Incomes fall for UK households

A combination of high inflation and low earnings growth has caused the incomes of UK households to fall by 3.5 per cent in real terms according to the latest figures from the Office for National Statistics (ONS).

The annual households earning survey found that the median salary for a full-time worker in the UK increased by 1.4 per cent in 2011, but taking into account CPI inflation of at least 5 per cent, this represents a 3.5 per cent fall in average pay and earnings.

Overall earnings growth was just 0.5 per cent compared with 2010, when part-time worker was taken into account.

The number of full-time workers fell by 380,000 in 2011, while the numbers of part-time employees grew by 72,000.

The figures highlight a growing pay gap between those on high salaries such as professionals, directors and senior managers, and those in occupations such as labourer, farm worker and postal worker.

While workers in these low-paid occupations suffered a 0.9 per cent drop in pay compared with 2010, professional pay increased by 1 per cent.

The median earnings of top directors and chief executives increased by 15% to £112,157, partly due to a move away from awarding bonuses and a subsequent increase in standard pay.

Waiters and waitresses suffered the biggest drop in pay, with an 11.2% decline compared with 2010.

The latest figures from Incomes Data Services (IDS) also show that UK workers are making a loss in real terms.

In October, when the national minimum wage increased to £6.08, wage rises fell to 2.3 per cent, compared with 2.4 per cent in September, according to IDS.

This reflects lower awards in leisure, retail, fast food and other private services firms, while the majority of public sector workers have had their pay frozen under the government’s austerity measures.

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