Average Salary UK: What is the average wage? | Moneyfarm (2024)

Salary is not often discussed openly by us Brits, although speaking to colleagues about it is legal. So, it’s unsurprising 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 awareness nationally, investigating by region, age, education group, and more.

According to the ONS(Office for National Statistics), 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 ofJune 2023, it was £613 per week or £31,876 per annum. The average salary in the UK in terms of total pay was £663 per week or £34,476 per annum.

In the UK, regular salaries from employment have steadily increased, and as of March 2024, the average UK salary 2024 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 average UK salary? – 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 January to March 2024, average monthly salary growth in the public sector was 6.3%. For the private sector the figure was lower at 5.9% and the breakdown was as follows:

• Finance and business – 6.3%
• Manufacturing – 6.8%
• Construction – 2.6%
• Wholesaling, retailing, hotels, and restaurants – 6.1%

Regarding the various industries, the data regarding the average salary in the United Kingdom is too large to be shown in this article. However, you can download an Excel spreadsheet entitled “EARN03: Average weekly earnings by industry” from the ONS website.

Average salaries 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 2023 regionally, (there have been no subsequent updates), was topped by London at £999 per week. The Southeast came next with £859. The lowest average was in the North East with £608.40. The average salary in Scotland was £702.80.

Average Salaries by Age Group

The other thing affecting annual salary is age. According to the “Average Earning by Age and Region report” in the House of Commons library, median pay as of April 2023 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)

It’s noticeable that average UK salaries rise until we reach the 50 to 59 and 60+-year-old groups, after which they fall. There areseveral reasonsfor this. Firstly, in their 50s, some people start to reduce their working hours as their homes are 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.

Average Salaries 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 onfigures.hrin 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 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, while the gap for part-time workers has gone from 0.6% to –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 tostatista.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 theONS, 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 pay UK 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 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: 2022” report on the ONS website.

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 learnhow to investdepend 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), means you need 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 thefinancial planningpage of the Moneyfarm.com website.

You might be tempted by some of thehigh-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 ofinvesting for incomeis viastocks 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 circ*mstances. 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 astocks 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, they help 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 in strategic planning and decision-making.

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 was a little bit of good news for the self-employed in the Autumn Budget: the reduction in Class 4 NI contributions, down from 9% to 8%. This will be key when it comes to securing the state pension.

Tax-Efficient Savings and Investments

ISAs of any kind are tax wrappers. Any returns growth your investment undergoes is 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 the 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.

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 salary in the UK 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, theminimum wage per hourin 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.

*Capital at risk. Tax treatment depends on your individual circ*mstances and may be subject to change in the future.