WAGES are continuing to rise for millions of workers across the UK.
Official figures released today by the Office for National Statistics (ONS) have revealed that basic pay is still growing at its fastest rate on record.
Wages are continuing to rise for millions of workers across the UK
Growth in employees’ average total pay, including bonuses, was 6.9% and growth in regular pay, excluding bonuses, was 7.3% in March to May 2023.
This, along with last month, is the joint highest rate since records began in 2001.
It comes after last month the ONS revealed growth in total pay was 6.5% and growth in regular pay was 7.2% among employees in February to April 2023.
The fresh figures mean it’s good news for households who are battling rising costs due to high inflation.
The UK’s current rate of inflation remains high at 8.7%.
After taking inflation into account, average pay including bonuses fell by 1.2% in the year to March to May 2023, or 0.8% excluding bonuses.
That means people’s pay packets have fallen in real-terms, when factoring in other living costs such as food and energy.
The Bank of England (BoE) has blamed rising wages for keeping inflation high and for causing the regular increase in its base rate.
BoE boss Andrew Bailey said yesterday that the “unexpected resilience” of the economy had aggravated wage and demand pressures, adding to “sticky” inflation.
In March to May 2023, average regular pay growth for the private sector was 7.7%, the largest growth rate seen outside of the pandemic period, according to the ONS.
For the public sector this was 5.8%, a larger growth rate was last seen in September to November 2001 when it was 5.9%.
Darren Morgan, director of economic statistics at the ONS, said: “Pay excluding bonuses has again risen at record levels in cash terms.
“Due to high inflation, however, the real value of weekly earnings are still falling, although now at its slowest rate since the end of 2021.”
Meanwhile, the unemployment rate for March to May increased by 0.2 percentage points on the quarter to 4% from 3.8%.
According to the ONS, this increase was driven by people unemployed for up to 12 months.
Most economists had predicted the rate would stick at 3.8% for the latest quarter.
There were 1,034,000 million job vacancies on average across April to June – down 85,000 on the previous three months.
Chancellor Jeremy Hunt said: “Our jobs market is strong with unemployment low by historical standards.
“But we still have around one million job vacancies, pushing up inflation even further.
“Our labour market reforms – including expanding free childcare next year – will help to build the high-wage, high-growth, low-inflation economy we all want to see.”
What does it mean for my money?
The main concern when workers see a “real-terms” fall in their salary is that it is not keeping pace with the cost of living.
Wage growth is still behind inflation as prices of everything from groceries to energy bills increase at a faster rate.
Official food inflation figures slipped from 19.1% to 18.4% in May, this just means prices are still rising – but at a slower rate.
Prices are still considerably higher than they were at the start of 2022, with bread and butter more than 20% more expensive.
It means you will be feeling the pinch as your income doesn’t go as far and may end up struggling to pay your bills.
What help can I get?
Extra help includes a £900 payment for millions on certain benefits including Universal Credit and a £150-£300 top-up for millions of pensioners.
The £900 has been split into three instalments of £301, £300 and £299.
Over eight million people are eligible for the help in total and should have received the first instalment last month.
The second and third instalments are due to be paid this autumn and in spring 2024.
You qualify for the payments if you receive the following benefits:
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Income Support
- Pension Credit
- Universal Credit
- Child Tax Credit
- Working Tax Credit
Meanwhile, the remaining payment is worth £150-£300 and will be made to millions of pensioners from November.
You will receive the payment if you qualify for this year’s Winter Fuel Payment, which you will get if you were born before September 25, 1957.
The money is essentially a top up to the Winter Fuel Payment which is designed to cover the costs of heating over the colder months.
You will be sent a letter from the Government in October or November if you are eligible for the £150-£300 top up.
You might also be able to get help via the Household Support Fund.
The help is being distributed by councils in England and what you are entitled to varies depending on where you live.
But, in most cases, you will be in line for support if you are on a low income or benefits.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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