Total pay for UK employees is 1.7% higher than it was a year ago, according to research by the Office for National Statistics (ONS).
Looking at statistics for September to November 2014 Its UK Labour market, January 2015 report found that regular pay was also 1.8% higher than a year earlier.
According to the report, the three-month average growth rates for both total pay and regular pay have been increasing since May to July 2014.
The report also found:
- Average regular pay, excluding bonuses for employees in the UK was £455 per week.
Average total pay, including bonuses for employees in the UK was £483 per week.
- Between November 2013 and November 2014, the Consumer Prices Index increased by 1%.
Geraint Jones, director at the Work Foundation at Lancaster University, said: “Pay has been the focus of much attention in recent months, and, following last month’s encouraging figures, total pay has continued to rise above the rate of price inflation.
“The latest data indicates that total pay is rising at a rate of 1.7%. The improvement over the last couple of months is largely due to the return of pay hikes in the financial sector, which, in the latest data is showing an annual rate of growth of some 2.6%.
“In manufacturing, where, over the early part of last year, there were signs of some tightening, the rate of pay increase has declined over recent months and now stands at 1.1%.”
Andrew Hunter, co-founder of job search site Adzuna, added: “The gap between inflation and pay has widened to a healthy margin, meaning employees are now seeing some real improvements in wages.”
David Morel, managing director of Tiger Recruitment, said: “With inflation now at 0.5%, and salaries rising, people’s real take-home pay is getting better all the time. This, in turn, creates confidence, which feeds back into the economy. It’s proving to be a virtuous circle.
“Minimum salary levels have also increased. People are now valuing themselves far more than they were two years ago. Again, this is a sign of rising confidence.
“In 2015, we expect the market to continue to favour the candidate and for average salaries to increase further.”