Wage rises outpaced by inflation for fifth year running, official data shows

The average pay rise improved to 2.2% – from 1.5% a year earlier – but still failed to match inflation at 2.4%

Wage rises failed to keep pace with inflation for a fifth successive year, according to official figures that show a recovery in pay in the year to April 2013.

Average pay rises jumped to 2.2% from the previous year’s total of 1.5%, but the recovery still left workers worse off after prices rose by an average 2.4%.

Much of the rise in wages was distorted by City bankers and other well-paid staff delaying salary rises and bonus payments to take advantage of the cut in the top rate of tax from 50p to 45p in the £1.

The decision of people earning more than £150,000 to wait for a change in the tax rate before taking some of their pay could account for much of the failure of average pay to recover during 2012.

The Office for National Statistics said median average annual earnings before tax for full-time employees, where workers were in the same job for at least a year, was £27,000. This was an increase of 2.1% compared with £26,500 in the year ending 5 April 2012.

Median gross annual earnings for men were £29,300, up 1.9% from 2012, and for women were £23,600, up 2.2%. But despite the higher pay rises for women, the pay gap between women and men widened from 9.5% to 10%.

More women work in part-time jobs than men and much of the recovery in employment until the spring this year was in part-time work, probably leading to a lower gross figure. Low pay remains a feature of British working life, according to the figures.

The ONS found there were 203,000 jobs held by over-21s with pay less than the national minimum wage, in breach of low pay rules.

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