UK Real Wages Data: Average Earnings and Purchasing Power

What average weekly earnings measure

The ONS Average Weekly Earnings (AWE) series is calculated from the Monthly Wages and Salaries Survey (MWSS), a survey of businesses. AWE measures the ratio of estimated total pay for the whole economy divided by the total number of employees, expressed as a weekly figure before tax and other deductions. It is not a measure of individual pay rates but reflects the aggregate earnings of all employees, including part-time and full-time workers. As such, it can be influenced by shifts in the composition of the workforce, such as changes in the proportion of part-time employment or the mix of high and low-paying sectors.

The ONS distinguishes between regular pay, which excludes one-off bonus payments, and total pay, which includes bonuses. Regular pay is generally considered the better indicator of underlying pay trends because bonus payments can be volatile and concentrated in particular sectors and months.

Nominal pay growth: the headline figures

Nominal regular earnings growth was 3.4% in February to April 2026, the lowest rate since August to October 2020, when it was 2.8%. This represents a continuing deceleration from the peak rates of pay growth seen in 2022 and 2023 when labour shortages following the pandemic pushed earnings growth to rates above 7%. Nominal total earnings growth was 4.4% in the same period, higher than regular pay growth because bonus payments in March and April 2026 were elevated compared with a year earlier, particularly in finance and business services.

In cash terms, average weekly earnings were estimated at 753 pounds for total pay and 697 pounds for regular pay in April 2026. Both figures represent the long-run upward trend in AWE that has persisted across economic cycles, but the rate of increase has slowed materially as the post-pandemic wage surge receded.

Real pay: the purchasing power story

The critical figure for household finances is not nominal pay growth but real pay growth -- the change in earnings after adjusting for inflation. When CPIH inflation averaged 3.0% in May 2026 and regular pay growth was 3.4%, real regular pay growth was just 0.1%. This is barely positive and the lowest reading since March to May 2023, when real regular pay was down 0.6% on the year.

Real total pay growth, including bonuses and adjusted for CPIH, was 1.2% in February to April 2026. Using the narrower CPI measure rather than CPIH, real regular pay growth was 0.3% and real total pay growth was 1.3%.

The near-zero real regular pay growth figure matters because it means that for most employees, their spending power in real terms is essentially unchanged from a year ago even though their nominal pay has risen by 3.4%. Three years of elevated inflation eroded real wages substantially -- the cumulative increase in UK consumer prices between May 2021 and March 2026 was 27.3% according to ONS, while pay growth over the same period, although significant in nominal terms, has not fully offset this purchasing power loss for many households.

Public sector vs private sector pay

The public and private sectors showed markedly different pay growth rates in February to April 2026. Public sector regular earnings grew at 5.1%, while private sector regular earnings grew at 2.9%. The public sector figure is elevated partly because of the timing of NHS staff pay awards in 2026 being earlier relative to 2025, creating a favourable base effect. Within the public sector, the health and social work industry is most affected by these timing effects. ONS cautions that the comparison between public and private sector growth rates should be interpreted with this timing effect in mind.

For private sector workers, 2.9% regular pay growth compares with CPIH inflation of 3.0%, meaning real regular private sector pay growth is approximately 0.1% -- effectively flat. The last time private sector regular pay growth was below 2.9% was August to October 2020, during the pandemic, when it was 2.4%. After the wholesaling, retailing, hotels and restaurants sector at 3.5%, all other private sectors are growing at or below the CPIH inflation rate in real terms.

The earnings and inflation gap since 2021

The relationship between earnings growth and inflation is the defining economic story of the 2021-2026 period. CPI inflation rose from under 1% in early 2021 to 11.1% in October 2022, a period during which real wages fell sharply as earnings growth lagged price increases by a substantial margin. From mid-2023, nominal pay growth exceeded inflation for a period, providing some real wage recovery. However, as nominal pay growth has decelerated toward 3.4% and inflation has stabilised at 2.8%, the real wage improvement has narrowed significantly. Real regular pay growth of 0.1% represents the slimmest margin of positive real wage growth since the 2023 recovery began.

Household debt stood at 117.5% of disposable income in Q4 2025, according to the Bank of England, indicating that many households are carrying significant debt burdens accumulated partly as a result of the cost of living squeeze. At near-zero real wage growth, the capacity to reduce this debt burden while maintaining living standards remains constrained.

Average weekly earnings by industry

The ONS publishes earnings growth data broken down by industry sector, allowing comparison of how pay is evolving across different parts of the economy. In February to April 2026, public sector regular pay growth of 5.1% was the strongest, followed by wholesaling, retailing, hotels and restaurants at 3.5%. Finance and business services drove the bonus-inclusive total pay figure higher, with one-off payments in March and April 2026 elevated relative to 2025. Sectors with weaker pay growth include construction, where pay growth has moderated as the housing market slowed, and parts of manufacturing exposed to global demand conditions.

Pay growth and the Bank of England

The Bank of England's Monetary Policy Committee monitors wage growth carefully as an indicator of domestic inflationary pressure. Elevated wage growth, particularly in services sectors, can feed into services price inflation through higher labour costs. Services CPI was 3.7% in May 2026, consistent with the Bank of England's concerns about domestic cost pressures sustaining inflation above target. The Bank's April 2026 Monetary Policy Report cited services inflation as a key factor in its decision to hold the base rate at 3.75%.

The deceleration in nominal regular pay from the peaks of 2022-23 is providing some relief on this front, but at 3.4% it remains above the level consistent with 2% CPI inflation given current productivity growth. The Bank of England has estimated that regular pay growth of around 3% would be broadly consistent with the 2% inflation target, assuming trend productivity.

What this means for take-home pay

The ONS AWE figures are pre-tax, before Income Tax, National Insurance, pension contributions, and other deductions. For employees, the net take-home pay impact of a 3.4% pay rise depends heavily on their marginal tax rate and the operation of the income tax personal allowance, which has been frozen at 12,570 pounds since April 2021 and is due to remain frozen until April 2028 under current government plans. This fiscal drag means that the personal allowance has effectively declined in real terms by more than 20% since 2021, increasing the effective tax burden on employees even without explicit rate rises.

A basic rate taxpayer on the median UK salary of approximately 35,000 pounds receiving a 3.4% pay rise of around 1,190 pounds before tax would retain approximately 833 pounds after Income Tax and National Insurance, a real-terms increase of around 130 pounds after accounting for 3.0% CPIH inflation -- approximately 10 pounds per month additional purchasing power.

What is the current average weekly wage in the UK?

Average weekly earnings were 753 pounds (total, including bonuses) and 697 pounds (regular, excluding bonuses) in April 2026, according to ONS.

Are UK wages keeping up with inflation?

In February to April 2026, real regular pay growth after CPIH inflation was 0.1%, barely positive. Real total pay growth was 1.2%, slightly better due to elevated bonus payments. Most private sector employees are seeing near-zero real wage growth.

What is the difference between nominal and real wage growth?

Nominal wage growth is the percentage increase in pay before adjusting for inflation. Real wage growth subtracts inflation, showing whether purchasing power has actually increased. With nominal regular pay at 3.4% and CPIH at 3.0%, real regular pay growth is approximately 0.1%.

Why is public sector pay growth higher than private sector?

Public sector regular pay grew at 5.1% in February to April 2026, compared with 2.9% in the private sector. The public sector figure is partly elevated by the timing of NHS pay awards in 2026 being earlier in the year relative to 2025, creating a favourable base effect rather than a permanent acceleration.

When is the next ONS earnings release?

ONS publishes Average Weekly Earnings monthly alongside the Labour Market Overview. The next release is scheduled for 21 July 2026, covering March to May 2026.

Regional pay variation

The ONS AWE national figure masks significant regional variation in pay levels and growth rates. London consistently shows the highest average pay, reflecting the concentration of high-value financial, professional and technical services employment. However, when adjusted for the higher cost of living in London, particularly housing costs, the real pay advantage is considerably smaller than nominal figures suggest. Regions such as the North East, Yorkshire and the Humber, and Wales show average earnings substantially below the national figure, while the South East and East of England sit closer to the national average.

Pay growth rates also vary by region, partly reflecting differences in sector composition. Regions with larger public sector employment shares tend to track public sector pay settlements more closely, while regions dominated by manufacturing or retail face different pay dynamics. The ONS publishes regional pay data in its Annual Survey of Hours and Earnings (ASHE), released annually, which provides detailed breakdowns by region, sector, occupation and full-time/part-time status. ASHE is the most comprehensive source of UK earnings distribution data but is published with a longer lag than AWE.

The gender pay gap

The ONS ASHE tracks the gender pay gap, defined as the difference between median hourly earnings of male and female employees as a percentage of male median hourly earnings for full-time employees. The gender pay gap has narrowed significantly over the long term but persists. For full-time employees, the gap was approximately 7-8% in the most recent ASHE data, reflecting a combination of occupational segregation, seniority differences, and the ongoing impact of career breaks associated with caring responsibilities on lifetime earnings trajectories. When all employees including part-time workers are included, the gap is wider because women are more likely to work part-time, and part-time roles generally carry lower hourly rates.

National Living Wage and earnings floor

The National Living Wage (NLW) for workers aged 21 and over increased to 12.21 pounds per hour from 1 April 2026, a rise of 6.7% from the 2025 level of 11.44 pounds per hour. This represents an annual full-time equivalent of approximately 23,873 pounds before tax. The National Minimum Wage for 18-20 year olds increased to 10.00 pounds per hour and for under-18s to 7.55 pounds per hour. The April 2026 NLW increase of 6.7% was above the 3.4% average earnings growth rate, compressing the earnings distribution at the lower end and providing a real-terms pay increase for the lowest-paid workers -- one of the few cohorts receiving above-average real wage growth in February to April 2026.

Productivity and the real wage constraint

Sustained real wage growth over the long run is ultimately constrained by productivity growth, the rate at which the economy generates more output per hour worked. UK productivity growth has been consistently weak since the 2008-09 financial crisis, a phenomenon economists refer to as the productivity puzzle. Without meaningful productivity improvement, the economy faces a choice between higher real wages requiring higher output to fund without triggering inflation, or higher inflation as wage costs are passed through into prices. The Bank of England estimates that nominal regular pay growth of around 3% would be broadly consistent with the 2% inflation target given current productivity trends, precisely the level at which wage growth currently stands. This means that unless productivity accelerates, the narrow real wage growth of 0.1% seen in February to April 2026 may persist even after the current inflation spike subsides.

Bonuses and the total pay gap

Total earnings growth of 4.4% exceeded regular earnings growth of 3.4% in February to April 2026, a gap of 1 percentage point attributable to elevated bonus payments. ONS identified finance and business services as the primary sector driving above-average bonus payments in March and April 2026 relative to the same period in 2025. This means that the divergence between regular and total pay growth is concentrated in a relatively narrow segment of the workforce. For the majority of employees who do not receive significant bonus payments, nominal pay growth of 3.4% and real pay growth of 0.1% are the relevant figures.