Wages rise at fastest pace for over 20 years - but workers still worse off
Workers’ wages are failing to keep up with the rising cost of living. We explain howto boost your income or bag a pay rise


Wages have risen at the fastest rate in more than 20 years but are still failing to keep up with inflation - leaving workers with a pay cut in real terms.
Average pay, including and excluding bonuses, rose by 6.4% between September and November compared with the same period in 2021, according to the Office for National Statistics (ONS).
It is the fastest growth since 2001, but when adjusted for inflation, wages fell in real terms by 2.6%.
It means millions of workers face a pay cut as inflation eats into their earnings.
Living costs are rising at the fastest rate in almost 40 years, with energy, food and travel prices experiencing record highs. Inflation, the rate at which prices rise, is currently at 10.7%.
Darren Morgan, director of economic statistics at the ONS, said the "real value" of people's pay was continuing to fall, with regular earnings dropping at the fastest rate since records began once inflation is taken into account.
Prime Minister Rishi Sunak has promised to halve inflation this year while Chancellor Jeremy Hunt said the UK labour market remained "resilient".
"The single best way to help people's wages go further is to stick to our plan to halve inflation this year," Hunt said. "We must not do anything that risks permanently embedding high prices into our economy, which will only prolong the pain for everyone."
How to deal with high inflation - ask for a pay rise
Alice Haine, personal finance analyst at investment platform Bestinvest, says: “With the pay squeeze intensifying and typical households likely to be £2,100 worse off by April 2024, according to the Resolution Foundation, the industrial action rapidly becoming a regular feature of post-pandemic life, as workers down tools in a bid to secure pay rises more closely aligned to the inflation rate, is likely to persist.
It makes sense to cut your outgoings to help your money go further. You can do this by cutting the cost of your gas and electricity usage, switching broadband and being clever with your food shop.
What else?
- Ask for a pay rise. While reducing the amount you spend will help, securing a higher wage will also help you fight back against the eroding effects of inflation on your pay packet.
- Claim the tax relief you are entitled to. Make use of tax reliefs and benefit schemes that you may qualify for, such as the working-from-home tax relief, the workplace uniform tax refund and the tax-free childcare allowance.
- Mitigate the effects of inflation on your savings. High inflation is a disaster for your savings. It means in order to grow your savings in real terms, you need to find savings accounts that pay rates above the rate of inflation. These simply don’t exist right now. The best savings account on the market is First Direct Regular Saver which pays 7% on savings up to £3,600. (Note you need its current account). See our article on the best savings rates for more.
Look After My Bills Newsletter
Get the best money-saving tips, tricks and deals sent straight to your inbox every week. Make sense of your money in partnership with The Money Edit.
Katie is staff writer at The Money Edit. She was the former staff writer at The Times and The Sunday Times. Her experience includes writing about personal finance, culture, travel and interviews celebrities. Her investigative work on financial abuse resulted in a number of mortgage prisoners being set free - and a nomination for the Best Personal Finance Story of the Year in the Headlinemoney awards 2021.
-
Octopus Energy relaunches energy tracker deal – we explain what you need to know and if it could save you money
If you’re an Octopus Energy customer, you may be able to save on your energy bills with the relaunch of its tracker deal. We look at how it works
By Sue Hayward Published
-
Three energy firms pay £8m in switching compensation - has your provider paid out?
More than 100,000 customers have received compensation after changing providers, but is now a good time to switch energy suppliers?
By Tom Higgins Published
-
Save on petrol: how to save 5p off a litre of fuel at Morrisons
Petrol prices may have been falling since last summer but every penny counts at the pump. Here’s how to save 5p a litre at Morrisons for a limited time
By Sue Hayward Published
-
Morrisons relaunches discount scheme with cheaper prices for loyal shoppers
Morrisons is the latest supermarket to revamp prices and offers for its loyalty scheme members
By John Fitzsimons Published
-
Coronation freebies and discounts: what’s up for grabs
From free railcards and holiday giveaways to discounts off food, we highlight the special offers launched to mark the coronation of King Charles III
By Ruth Emery Last updated
-
8 ways to get interest-free money if you’re struggling
Here are 8 clever ways to get interest-free income if you’re struggling with the rising cost of living
By Vaishali Varu Last updated
-
Best birthday freebies and discounts
Enjoy your special day with these birthday discounts and freebies - we highlight 22 of the best offers
By Vaishali Varu Published
-
Festival ticket scam warnings – how to protect yourself
Concert ticket scams have rocketed by more than 500% over the past year, while festival fraud has more than doubled. Here’s how to keep yourself safe ahead of the festival season.
By Tom Higgins Published
-
Co-op Member Prices: Supermarket unveils discount scheme for loyal shoppers
New Co-op scheme means reduced prices for shoppers who join the co-operative. How much does it cost to join, and how does it compare to similar schemes run by Sainsbury’s and Tesco?
By John Fitzsimons Published
-
Emergency alert test: what to expect and how to avoid being scammed
We tell you everything you need to know about the UK’s first emergency alert test, which takes place this Sunday
By Vaishali Varu Published