An average real income growth of around 2% is expected between 2019-2020, according to fiscal watchdog the Office of Budget Responsibility (OBR).
The OBR’s Economic and fiscal outlook, published in December 2014, also revealed that this will leave real pay lower in 2019 than it was in 2007.
But its wage forecast also indicated that the OBR anticipates a fall in general government employment of around one million members of staff by 2020.
Matthew Whittaker, chief economist at research and policy organisation the Resolution Foundation, said: “It’s encouraging to see pay growth may finally be gaining some momentum after what has been another disappointing year for wages.
“Pay and productivity growth will be the key measures to watch in 2015. Significant improvements would boost living standards and make the government’s fiscal job far easier.
“But a continuation of sluggish pay growth will mean the economic recovery lacking the feel-good factor. Significant differences in recent pay projections from the Bank and the OBR show there is considerable uncertainly on these measures.
“Crucially, neither are projecting a long-overdue rebound in pay, following the UK’s six-year pay squeeze.
“Rising employment and the return of full-time roles has been the big success story of 2014. The question now is whether a strong labour market will lead to a reduction in the less secure forms of employment that have grown during the downturn, or whether the historically high level of non-traditional forms of work, such as zero-hours and temporary contracts, is here to stay.”