Average pay for UK employees fell by 0.9% in April

business scene

According to the ONS*, average UK pay for employees rose in March then fell by 0.9% in April, based on provisional data.

Pay went up in March but falls in April

Average pay went up in March by 2.7% from a year earlier.  However, pay then fell in April by 0.9% compared with March 2019.

These numbers are for paid employees only, also known as ‘PAYE’ employees.  PAYE simply means someone who is on a payroll as a paid employee.  It does not cover the self employed but does cover the vast majority of people working in the UK.

It does include anyone who is on the government funded Job Retention Scheme, or Furlough.

What is the average wage?

For March, this was £22,128.  This had fallen to £21,468 in April.  This chart from the ONS shows pay rising over the past few years and the recent drop;

Average earnings falls in April

Graph showing fall in average earnings in April 2020

The number of employees also drops in April

In March 2020, there were 29 million people in the UK registered as employees through a PAYE scheme.  In April, that figure dropped by 348,000 people, or 1.6% in one month, to 28.6 million employees (rounded).

This graph from the ONS shows the number of employees rising over recent years and the fall in April;

 

Graph showing recent fall in employment in April 2020

Graph showing recent fall in employment in April 2020.

 

What do the figures tells us?

According to the ONS, the numbers for April are an early set of figures but do cover 90% of the information available at the moment so are likely to be fairly close to the final figures.

According to the ONS. these numbers;

“…indicate that employee growth slowed more substantially recently (becoming negative in April according to early estimates) coinciding with the coronavirus (COVID-19) pandemic, as well as related economic and policy responses.”

In other words, the economic effects of the policies needed to combat the Covid 19 pandemic, including the lockdown and enforced closure of many businesses, are starting to feed through into the economic data, leading to some early evidence of reductions in pay and jobs.

 

Sources and Notes

The ONS, or Office National Statistics, are the official government agency for economic data in the UK.

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/earningsandemploymentfrompayasyouearnrealtimeinformationuk/may2020