Total pay increases by 0.1% in real terms

Total pay, including bonuses, increased by 0.1% in real terms in Great Britain between January-March 2016 and January-March 2017, according to research by the Office for National Statistics (ONS).

Its UK labour market: May 2017 report, also found that regular pay, excluding bonuses, fell by 0.2% in real terms between January-March 2016 and January-March 2017. This is the lowest growth rate in Great Britain since 2014.

In nominal terms, which have not been adjusted for consumer price inflation, total pay increased by 2.4% between January-March 2016 and January-March 2017. This is higher than the 2.3% growth rate recorded between December 2015-February 2016 and December 2016-February 2017.

Regular pay in nominal terms increased by 2.1%, compared to a growth rate of 2.2% between the three months to February 2016 and the three months to February 2017.

Average total pay, including bonuses, was £512 a week in nominal terms before tax and other deductions from pay for employees in Great Britain in March 2017. This compares to £500 a week in March 2016. Average regular pay, excluding bonuses, was £479 a week in March 2017, increasing from £469 a week in March 2016.

In real terms, which have been adjusted for consumer price inflation, average total pay for employees in Great Britain was £497 a week in March 2017, before tax and other deductions from pay. Average regular pay in real terms, which excludes bonuses, was £465 a week before tax and other deductions from pay.

Average total pay for employees in Great Britain, in nominal terms, increased by 34.8% between January 2005 and March 2017, rising from £380 a week to £512 a week. Over the same time period, the Consumer Price index, including owner occupiers’ housing costs (CPIH), increased by 31.2%.

Sign up to our newsletters

Receive news and guidance on a range of HR issues direct to your inbox

OptOut
This field is for validation purposes and should be left unchanged.

Gerwyn Davies, labour market adviser at the Chartered Institute for Personnel and Development (CIPD), said: “The overall employment figures are strong, with employment up and unemployment down to the lowest rate since 1975. However, that positive news is overshadowed by confirmation that real regular pay is now falling, with a 0.2% drop in the last three months.

“The combination of rising inflation and poor productivity paints a grim picture for UK living standards. As well as hitting UK workers in their pockets, this fall in real regular pay also potentially puts at risk an economic recovery that has been reliant on strong consumer spending.”