Average salaries fall while corporate bosses see their pay rocket

People in the average British household are seeing their salaries fall while the wages of corporate bosses are increasing, official figures showed yesterday.

On average, the annual salary of a full-time worker in the UK rose by just 1.4 per cent to £26,244 last year, according to the Annual Survey of Hours and Earnings, published by the Office for National Statistics.

But the modest increase represents an average 3.5 per cent pay cut in real terms, as consumer price index annual inflation stands at 5 per cent.

Meanwhile, directors and chief executives of leading organisations saw their median pay increase by 15 per cent to £112,157. Senior management pay rises were also well above the national average, up 7.1 per cent year-on-year to £77,679.

The survey, made up of data collected in April, demonstrate how Britain's economic pain is hitting those at the bottom of the pay scale hardest. Average salaries for workers in "elementary occupations", such as labourers and postal workers, actually fell by 0.9 per cent. Professional pay was up 1 per cent and managerial wages increased by 0.5 per cent.

Brendan Barber, the general secretary of the TUC, said the figures represented "a year of wage stagnation", and he anticipated worse to come. "Falling wages and self-defeating austerity have been the main reasons for the UK's economic woes, rather than a eurozone crisis which has yet to fully show up in official statistics," he said.

Hourly earnings of the best paid employees increased by 1.8 per cent, compared with 0.1 per cent for the lowest paid. The region with the highest paid jobs, the City of London, where workers receive a median wage of £981 per week, was almost three times higher than the lowest-paid district – Torridge in Devon, where weekly salaries average £333.

The gender pay gap continued to narrow, falling below 10 per cent for the first time, as women's pay increased at a higher rate than men's. However there were signs of progress in bringing salaries closer to parity.

The average wage gap between men and women was down by £179 to £5,409. Men earned on average £13.11 per hour in April, while women's hourly pay was £11.91 – a difference of 9.1 per cent.

"Today's fall in the gender pay gap is very welcome, though with female unemployment at a 23-year high the main concern for many women will be keeping jobs, let alone securing higher pay," said Mr Barber.

The figures also showed a large migration of 72,000workers from the full-time sector into part-time work.