The latest insight from The Global Payroll Association (GPA), reveals that despite the UK’s overall picture showing that earnings are on the rise, 23 local areas of the UK have actually seen salaries fall by as much as -16.6% in the past year.
During the recent Spring Statement, Chancellor Rachel Reeves stated that millions of UK workers are set to receive a £1,400-a-year boost to their earnings as a 6.7% increase to the National Living Wage kicks-in from April onwards.
GPA’s analysis of average annual earnings data for the UK* shows that wages have been increasing steadily over the last decade, increasing every year since 2005, other than 2021 when they fell by a marginal -0.7%.
The largest annual rate of growth came last year (2024), when the average earnings climbed by 8% to £38,224 and the GPA forecasts that this figure could climb by a further 15% by 2030 – increasing to £43,834 (2030).
But despite this top line positivity, not every area of the UK is seeing positive growth and a more granular analysis of earnings data at local authority level, conducted by the GPA, shows that no less than 23 local authorities have seen earnings decline over the last year – including five London boroughs.
Between 2023 and 2024, the biggest drop in salary was recorded in Coventry where average earnings fell by -16.6%, from £39,800 to £33,182.
Mid Sussex saw a drop of -7.4%, followed by Boston (-5.6%), Gravesham (-5.3%), Colchester (-4.2%), Moray (-4.2%), Stroud (-4.1%), Hammersmith & Fulham (-4%), Lambeth (-3.9%), and the New Forest (-3.8%).
The other Local Authority districts to see salaries decline are Tower Hamlets (-3.5%), Bracknell Forest (-3.3%), Hillingdon (-2.4%), West Dunbartonshire (-1.6%), Staffordshire Moorlands (-1.6%), Bromley (-1.6%), Hinckley & Bosworth (-1.5%), Castle Point (-1.2%), Tandridge (-1.2%), Derbyshire Dales (-0.9%), East Renfrewshire (-0.6%), Worcester (-0.2%), and High Peak (-0.1%).
Melanie Pizzey, CEO and Founder of the Global Payroll Association, said,“At the very top line, UK workers have enjoyed a decade of consistent earnings growth, with the biggest annual boost coming last year. This growth is forecast to continue through to 2030, however, not every area of the nation is enjoying the same positive upward trends.
And whilst the Chancellor has been quick to claim the plaudits of increased earnings due to the rise in the National Living Wage, it’s the changes to employer National Insurance Contributions that have a greater potential to derail wage growth.
From this week, UK businesses are required to pay a significantly higher contribution where National Insurance is concerned and we’ve already seen mass redundancies leading up to the 1st April from those businesses who simply can’t stomach the increase.
Whilst UK businesses have already streamlined their workforce, the chances are that pay rises will also be fewer and further between over the coming years and this could well reverse the positive earnings growth seen over previous years.”
