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Revealed: The Postcode Lottery of Pay Rises

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New research from The Global Payroll Association (GPA), reveals that the average UK salary has increased by 18.7% over the past five years, but that wage growth is a postcode lottery with pay rises ranging from 16.2% to 24.7% across the nation’s different regions.

The Global Payroll Association has analysed the change in average annual salary* for the UK workforce over the past five years, 2018 – 2023 (latest available data), to see what kind of pay rises people have benefitted from, and how it varies between one region of the country and another.

The data reveals that over the past five years, the UK’s average annual gross salary has grown from £29,817 to £35,404. This marks a five-year increase of 18.7%, or £5,587, and means that over that time, the average annual salary increase in the UK stands at 3.5% per year.

But the pay rises that employees have enjoyed over the last five years are different depending on which region of the UK they live in.

The largest pay increase has been recorded in Northern Ireland. Here, the average salary has increased by 24.7%, rising from £25,625 to £31,962 over five years.

The five-year pay rise in the West Midlands stands at 22.4%, followed by the South West (22.2%), Yorkshire & Humber (21.7%), the North West (20.2%), Wales (19.8%), and Scotland (19.8%).

The regions in which pay rises have failed to match the national average are the East Midlands (18.5%), North East (16.8%), East of England (16.7%), London (16.7%), and the South East (16.2%).

But despite receiving the smallest pay rises, workers in London and the South East remain by far the best paid in the UK, earning an average salary of £47,301 and £38,526 respectively. 

London employees have also enjoyed the largest five-year increase when it comes to cash value, seeing their average salary rise by £6,758 since 2018.

Meanwhile, the lowest average salaries are currently being earned in the North East (£30,133) where employees have also seen the smallest five-year growth in cash value with a rise of just £4,328.

Melanie Pizzey, CEO and Founder of the Global Payroll Association, says: “The rate at which employee earnings has gone up over the past five years reflects what a difficult period we have lived through in terms of economy and business security. In other words, it’s been lacklustre. The COVID pandemic was quickly followed by a cost of living crisis and soaring interest rates which means that the small raises people have received hold even less value than they should.

We can hope that as the economy recovers, which it is showing tentative signs of doing, employers will feel comfortable upping the salaries of their staff to match the rate at which the cost of living has increased.

But in the meantime, it’s more important than ever for businesses to make sure their payroll systems are as efficient and secure as they can possibly be to ensure that everyone gets paid the right amount at the right time to help them navigate what is a difficult financial time for so many.”

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