What Is the Average Salary in the UK? Explore Income Trends and Insights

Asking what salary someone is getting is not a question often discussed openly by us Brits, even though speaking to colleagues about it is perfectly legal. So, it’s not surprising that many are unaware of the average salary in the UK. To bring that information out in the open, we at Moneyfarm have done an exercise to increase national awareness in terms of the average monthly salary and average disposable income in the UK, investigating by region, age, education group, and more.

According to the ONS , the average wage in the UK for regular pay in November 2022, was £586 per week, or £30,472 per annum. The average wage in terms of total pay was £629 per week or £32,708 per annum. Total pay includes bonuses.

As of June 2023, it was £613 per week or £31,876 per annum. The average salary in terms of total pay was £663 per week or £34,476 per annum.

Regular salaries from employment have steadily increased, and as of March 2024, the average UK salary in terms of average weekly earnings (AWE) as regards total earnings was estimated to be £682 (£35,464 per annum) and £637 (£33,124 per annum) for regular earnings.

The factors affecting average salary

When answering the question, “What is the national average salary in the UK? – several factors need to be considered. They include:

• The average salary in the UK per month according to sector and industry
• Geographic region
• Age group
• Education/qualification
• Gender

Each of these factors is discussed individually below.

Average salaries by sector and industry

Although not as large as in previous months, the difference between the national average salary of the UK private and public sectors still exists.

From June to August 2024,  average monthly salary growth in the public sector was 5.2%. For the private sector the figure was lower at 4.8%.

Annual average regular earnings growth for the public sector was 5.2% in June to August 2024, less than the previous three-month period (5.7%) (Figure 4). For the private sector this was 4.8%. The last time growth was lower than this was in December 2021 to February 2022 (4.6%).

Growth of annual average total earnings as regards the public sector was 0.1% in June to August 2024. This figure is influenced by the one-off NHS and civil service non-consolidated payments made in June, July and August 2023. The single-month yearly growth for the public sector in July and June 2024, saw little growth or even decreases on the year.

For the private sector, annual average total earnings growth was 4.7% in June to August 2024. The last time growth was lower than this was in September to November 2021, when it was 4.6%.

During this same timeframe, the manufacturing sector saw the biggest annual growth rates both in terms of regular and total pay, at 6.0% for regular pay and 6.2% for total pay.

What is the average salary in the UK by region?

The average salary UK figures referred to above are for full-time employees in the UK as a whole. For information on the average income in the UK by region, you can download an Excel spreadsheet entitled “EARN05” on gross weekly earnings of full-time employees by region from the ONS website.

The average UK salary for April to June 2024 regionally, was topped by London at £996 per week. The Southeast came next with £859. The lowest average was in the North East with £689. The average salary in Scotland was £756.

What is the average salary in the UK by age group?

Average UK salary by age is another important aspect that has an impact on earnings. According to the “Average Earning by Age and Region report” in the House of Commons library, median pay (published December 2023 – at the time of writing we await a subsequent update) was:

• 18 to 21-year-olds – £441 per week (£22,932 per annum)
• 22 to 29-year-olds – £583 per week (£30,316 per annum)
• 30 to 39-year-olds – £722 per week (£37,544 per annum)
• 40 to 49-year-olds – £770 per week (£40,040 per annum)
• 50 to 59-year-olds – £727 per week (£37,804)
• 60+ year-olds – £651 per week (£33,852 per annum)

In terms of average annual salary in the UK, it’s noticeable that salaries rise until we reach the 50 to 59 and 60+-year-old groups, after which they fall. There are several reasons for this. Firstly, in their 50s, some people start to reduce their working hours as their homes become child-free.   Also, the majority own their homes outright and are more likely to be debt-free. Lastly, those over 60 are more confident of their retirement provision and people who got their financial planning right start taking early retirement.

What is the average salary in the UK by education level?

The level of education and qualification achieved also impacts the size of the average salary in the UK.

According to figures published on figures.hr in November 2023, the annual average wage here in the UK is £31,461 per year. In the UK, individuals with qualifications up to A levels typically earn around £25,000. However, those with an undergraduate degree see their earnings rise by approximately 36% to £34,000. Moreover, those holding advanced degrees like Masters or PhDs, experience a further 24% increase, taking their average salary to £42,000.

Average Salaries and the Gender Gap

Although it has decreased significantly over recent decades, the gender pay gap is still a concern. According to the graph (figure 1) on the ONS’s “Gender pay gap in the UK: 2023, the gap for all employees has decreased from 27.5% in 1998, to about 14.3% in 2023. For full-time employees, the gap has gone from 17.4% to 7.7% over the same period. However, the 7.7% 2023 figure has increased by 0.1% from 2022. It is, however, significantly below the figure of 9%, which was the gap before the COVID 19 pandemic in 2019.

The gap for part-time workers remains the same in 2023 as it was in 2022, at minus 3.3%.

The average hourly wage in the UK

The average hourly wage based on full-time salaries across the UK as a whole, is £17.40 per hour, according to statista.com. The average hourly salary in London is the highest at £22.15. Conversely, the lowest hourly rate is in the North East at £15.49 per hour.

The highest-paying jobs in the UK

According to the 2023 Annual Survey of Hours and Earnings (ASHE) report by the ONS, the highest average yearly salary in the UK was paid to Chief executives and senior officials. The 2022 highest-paying job was that of CEO at £79,835 per annum. It increased to £84,131 per annum in 2023. The second highest-paying job goes to marketing, sales and advertising directors, whose median salaries averaged out at £83,015 per annum.

How are the averages compiled?

All the average wage figures shown above are median salary UK averages and not “mean” salary UK averages. The significance is that whereas “mean” averages relate to individuals and can be significantly affected by small numbers of higher earners, “median” averages are weighted to apply to the typical individual.

All the average UK pay figures we refer to are for full-time workers. The ONS defines full-time as working more than 30 paid hours per week, whereas 30 hours or less is defined as being part-time. The only exception is teachers who are defined as being full-time employed if they work at least 25 paid hours (or more) per week.

The explanation of the terms “means, median, full time and part-time” is as per the glossary section of the “Employee earnings in the UK: 2023” report on the ONS website.

Comparison of the UK Average Salary with Other Countries

Going by the national average salary in the UK as per the March 2024 figures from the ONS, (and using the currency conversion rate as at the time of writing), the average gross monthly pay in Euros is €2,760, and the take home figure is €2,281. The table below shows the average monthly salary in countries across Europe.

The figures in the table above are as per those published on the CMD Recruitment website in November 2023.

In terms of gross UK average salary per month, €2,760, puts the UK in 12^th place, as does the monthly take home pay figure of €2,281. So, it would appear that we are not doing as well as our European counterparts.

Average household income in the UK

The average salary in the UK refers to the amount earned by an individual in a given time period. In contrast, household income in the UK refers to the total income earned by all members of a household in that same period. The desire to invest and the ability to learn how to invest depend initially on your household income.

The lowest median disposable household income for the year 2022 (latest available figures from the ONS) for the poorer-paid sector was £14,500. For the wealthiest sector, it was £66,000. The average household income in the UK for the same period was £32,300.

Knowing your disposable household income (“disposable” indicating the sum after direct taxes have been deducted), allows you to ask yourself:

• Why do you want to invest?
• What is your risk tolerance?
• How much can you afford to invest?
• When do you want to be able to access your invested funds?

If, after answering these questions, you still wish to invest, you need to do some further research. You’ll find plenty of information on the financial planning page of the Moneyfarm.com website.

You might be tempted by some of the high-return investments in the UK. However, you need to be aware that although all investments carry some risk, those offering high returns usually have a higher risk factor.

Investment opportunities for increasing income

One way of investing for income is via stocks and shares. They are traded on stock exchanges worldwide and in indices like the UK’s FTSE 100 and USA’s S&P 500, and many pay monthly dividends.

As we’ve already mentioned, investing of any kind involves risk. If you are not familiar with how stock markets work or how to trade stocks and shares, seek financial advice.

Other investment opportunities for increasing your income include real estate, corporate and government bonds, and ETFs.

Regarding individual stocks and shares ISAs, choosing the best ISA for you depends on your financial circumstances. There are five from which you can choose:

• Cash ISA
• Innovative Finance ISA
• Junior ISA
• Lifetime ISA
• Stocks and shares ISA

If you want to learn more about each of the five options, you’ll find a blog entitled “Types of ISAs” on the Moneyfarm website, which contains lots of helpful information.

If you are considering opening a stocks and shares ISA, you can choose from various tailored or personalised portfolios according to your risk tolerance. These portfolios carry a diverse range of shares in different companies and market sectors, and as such, this diversity helps to reduce risk. But remember – the higher the predicted return, the higher the risk.

Historical Trends in Average Salary in the UK

Understanding the historical trends in average salary provides valuable insights into a region’s economic development and labour market dynamics. In the context of the United Kingdom, the average salary has witnessed significant fluctuations over the past few decades. Factors such as inflation, government policies, industrial growth, and global economic conditions have played a crucial role in shaping these trends.

During the late 20th century, the average salary saw steady growth, reflecting the country’s economic prosperity. However, events like the financial crisis of 2008 led to stagnation and even decline in some sectors. Recent years have shown a gradual recovery, with the technology and finance sectors leading the way. The analysis of historical trends in average salary in the UK helps policymakers, economists, and businesses with strategic planning and decision-making.

What is the average salary in the UK for the self-employed

According to PayScale, the average salary UK self-employed people earn in the UK is £35,904.  The highest UK average wage goes to dentists, whose average annual wage is £71,705; physiotherapists, £44,884; and bricklayers, £42,054. The lowest paid include software engineers at £20,347, graphic designers at £21,689, and freelance photographers at £24,434.

Being self-employed has its attractions, including being your own boss and not having to answer to others, and flexible hours, which can be useful for balancing work hours and family commitments. However, being self-employed does have its challenges and disadvantages too.

The stress levels can be high as you alone are responsible for your success in gaining and maintaining clients and earning a sufficient income.

When you are in full employment, you will likely be given paid holidays and sick pay. You do not have that luxury when you are self-employed. If you don’t work, you don’t get paid.

Handling the necessary administration requirements can also be challenging. You either have to do your own accounting, including tax returns and making your NI contributions, or you have to hire someone else to do it for you, which can be costly.

However, there is a little bit of good news for the self-employed, because as of April 6, 2024, Class 4 NI contributions have been reduced from 9% to 8%. This will be key when it comes to securing the state pension.

How inflation affects the purchasing power of the average salary in the UK

Inflation reduces the purchasing power of the average salary in the UK.  According to a report published in the House of Commons Library, in April 2023, full-time employees’ median gross weekly earnings were £682 per week. It is higher than the previous year, when the median weekly earnings figure was £642, but when adjusted for inflation, it represents a decrease of 2.3% in real terms.

With inflation now much lower, in the three months to August 2024, average pay excluding bonuses and adjusted for inflation was 2.6% higher than the same period in 2023, while average pay including bonuses was 1.7% higher.

Tax-Efficient Savings and Investments

As the pressure on household income begins to lessen, people start thinking about the possibility of investing for the future. But given the concerns and fears that the memory of recent rocketing inflation stirs, it’s important to pick an investment vehicle that can outpace inflation in the long term.

ISAs of any kind are tax wrappers, and the stocks and shares ISA is the one that promises the best returns, albeit with an increased risk factor. Any returns or growth your investment undergoes are tax-free, as are any withdrawals. The annual ISA investment allowance is £20,000, spread across all types.

FAQ

How do salaries work in the UK?

Salaries in the UK are usually expressed as an annual amount, which is paid weekly, bi-weekly or monthly. Income tax and National Insurance (NI) contributions are deducted from salary by the employer before it is paid to the employee. The amount of tax and National Insurance deducted depends on the employee’s earnings and their tax code.

In addition, many employers also offer benefits such as pensions, health insurance, and paid vacation time. The minimum wage in the UK varies depending on the employee’s age and whether they are an apprentice.

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How is the average salary calculated in the UK?

The average salary in the UK is usually calculated by adding up the total earnings of all workers in a particular category or industry and then dividing that by the total number of workers.

What is the average salary in the UK?

The average UK salary in terms of total earnings is estimated to be £682 (£35,464 per annum), and £637 (£33,124 per annum) for regular earnings.

What is the minimum wage in the UK?

As of April 2024, the minimum wage per hour in the UK is  £11.44 for those 21 years of age and over, £8.60 for those 18 to 20, and £6.40 for under-18-year-olds.