Average earnings break through pounds 20,000 mark

AVERAGE EARNINGS for full-time workers have broken through the pounds 20,000 mark, despite a continuing moderation in the level of pay settlements, according to a report published today.

The average pay package now stands at pounds 20,700, compared with pounds 20,042 a year ago, the pay research group Incomes Data Services (IDS) said. This is the first time these figures have been published.

The index of earnings for full-timers rose by 3.6 per cent over the 12 months to April compared with an inflation rate of 1.6 per cent over the same period. But IDS said that the level of pay settlements was falling despite fears that a combination of the National Minimum Wage and the approaching millennium would force pay levels up.

"Neither pay settlement levels nor average earnings figures are showing any upward blip as a result of the minimum wage coming into operation," IDS said. "While the new measure must have had some impact on average earnings, the host of other factors influencing the figures make it impossible to gauge the effect."

The latest analysis of pay reviews showed about half of settlements were worth between 2 and 3.4 per cent.

IDS said that the number of settlements below 3 per cent were rising, although few firms are settling below a "floor" of 2.5 per cent.

But pay rises are still running well ahead of inflation, with one in five deals worth over 4 per cent. Inflation was just 1.3 per cent in May.

The Bank of England, whose Monetary Policy Committee sets interest rates, warned in its quarterly inflation report in May that earnings growth might no longer be falling.

It said that it feared earnings growth remained higher than settlements because of bonuses and merit-based pay.

But it said comparisons were difficult because the Average Earnings Index was only reinstated in March following a review commissioned by Gordon Brown, the Chancellor.

IDS's average pounds 20,265 annual earnings compares with a figure 25 years ago of just pounds 2,480 a year for male full-timers and pounds 1,400 for women.

Changing pay levels are only part of the shift in working practices. According to another report out today, Britain is on the brink of a "workstyle revolution" as the 9 to 5 working week becomes consigned to history.

Flexible working is now widespread, with many firms reporting increased performance. The Institute of Management said 8 out of 10 employers operated flexible working to meet changing business demands, remain competitive and give employees the chance to juggle home and work life. Flexible working includes working from home, job sharing, shift-work and school term-time working.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss