The UK is falling behind the rest of Europe with annual average salary increases, according to new research which analysed the pay rates for countries over the past two decades.
With the pandemic meaning financial worry and pay freezes for many employees across the country, the research found the UK ranks in 20th place, behind the likes of Ireland, France – and even the US.
The data shows UK salaries have risen by 20 per cent for full-time workers since 2000, compared to 35 per cent for Ireland, for example. Despite having the 7th highest real minimum wage at £7.56, the UK is behind in rankings as neighbouring countries improve their salary offerings at a faster rate.
Latvian employees were found to have the largest annual salary increase, rising by 148 per cent according to payroll software provider Mitrefinch, Which analysed the most recent figures available.
Workers in Lithuania have also experienced a high rise at 144 per cent, with those in Estonia also seeing a rise of over 100 per cent in average annual salary (138%).
This is frustrating for many employees since house prices in the UK continue to rise at a faster rate than average salaries
Julie Lock, Commercial Director at Mitrefinch said: “The pandemic has meant financial worries for employees across the UK have amplified, with many concerned about losing their jobs or facing pay cuts. Many companies have implemented pay freezes over the past year, meaning employees have had to wait longer to receive a pay rise or promotion than they normally would have.
“The data shows us that although employees across the UK are benefiting from one of the highest hourly minimum wage rates, the increase of both this rate and annual average salaries for full-time employees has been slow in comparison to neighbouring countries.”
Jayne Harrison, Head of Employment Law at Richard Nelson LLP said: “The data shows average annual salaries in the UK are rising at a slower rate than many neighbouring countries.
“This is frustrating for many employees since house prices in the UK continue to rise at a faster rate than average salaries, causing major issues for young people in this country as they struggle to get into the property ladder.
“After being hit by the pandemic, employees across the UK are looking to be supported financially by their employers as the economy begins to recover. Many key workers like social care, supermarket and delivery staff are not currently paid the real living wage in the UK.
“With the key role these workers have played in the pandemic, we are expecting to see more of a push back on this over the next year.”
See the full results of this research here
