Half of UK workers believe they are underpaid
Half of UK workers are unhappy with their pay – with salaries currently rising faster than inflation, but not to the extent that consumer spending power has been restored to what it was two years ago. A new study from Instant Offices has highlighted the median salary across multiple age groups, to highlight where workers may be receiving less than the market rate for their efforts.
Over the last five years, UK consumers have experienced a significant loss of spending power. Since the cost of living crisis began in late 2021, rampant inflation caused by price gauging, supply chain disruption, energy price fluctuations, and war in Europe, led to a total erosion of £65 billion in household spending power by May 2024. During that period, the average household was expected to be over £2,300 worse off, with bosses largely ruling out the idea of wages keeping pace with food, energy, and other essential costs.
While inflation has since slowed, and average wages have grown, this loss is still being keenly felt by British consumers, who remain guarded on their spending – especially ahead of future uncertainty. The fact a recent paper from Reed found that 50% of people feel they are not paid enough may not come as a surprise then. But what are the going rates that bosses are failing to meet?
Exploring data from Statista, a new analysis from Instant Offices has sought to uncover how much people are earning as a median, per age and career. And according to the results, 2024 saw the average median annual earnings for full-time employees hit £37,430, up £2,467 from 2023.
That might sound like wages are back on par with inflation, but there are clear gaps within those figures, which a simple overall median does not account for. Between different age demographics, for example. Workers under the age of 30 did not see their median rise above £32,292 per year. Meanwhile, workers between 40 and 49 years old commanded the highest median, at £42,796.
Medians and means of production
While it might sound like a matter of paying your dues and waiting for your salary to rise, but the data shows that the gender pay gap widens with age: especially between 30 and 59. This is often the period when career progressions are accelerating – and with men still accounting for a majority of top roles within UK companies, a woman in their 40s earning £42,000 might be “on track” with their peers, but still £3,000 less than the average man of the same age.
Most importantly, however, because Statista uses a median figure for this data, the numbers do not reflect a major class divide within the economy. Widely perceived as a more ‘neutral’ average, because unlike a mean average, it is less affected by a relatively small number of very high earners (such as those earning multi-millions) which would otherwise skew the results. But the fact is a median is placed squarely in the middle of a wage range – meaning 50% earn more, and 50% earn less than that figure.
It does not account for how many people earn far below, or far above that watermark – just that that is the mid-point between all wages. So, the data does not necessarily reflect how badly paid the 50% of people beneath that wage – the same number as those who felt they are underpaid in the other research – actually are.
So, according to the figures, pilots have a higher median wage than CEOs – by almost £10,000 per year. But due to the regulated nature of air travel, pilots and air traffic controllers tend to work in a much less diverse market than CEOs. So captains at British Airways (some of the highest paid in the UK) can earn between £100,000 and £167,000. But while many smaller companies have a CEO who earns less than the median, the ones who earn more may earn much, much more. The median CEO salary among the FTSE 100, for example, hit £4.58 million – a figure no pilot is likely to bring home any time soon.
Indeed, more widely, the average FTSE 100 chief executive is now paid 122 times the median UK full-time worker, according to research from the High Pay Centre. So, when figuring out whether an individual worker is underpaid, another metric they might also deploy is to compare how much their labour is valued in contrast not to fellow workers, but to the CEO who – according to various reports – may already be phoning in their own responsibilities, or automating them with ChatGPT. One study from AND Digital even found 45% of CEOs were already using AI to write reports or fulfil their other responsibilities – before passing off the output as their own work.
