Wages are slowly recovering from the effects of Covid-19 but pay growth in real terms has been non-existent for the past 12 years, official figures have shown.
Figures from the Office for National Statistics published today showed annual growth in employee pay grew in August as people continued to return to work from furlough.
Wages grew by 1.9 per cent for total pay (which includes bonuses) and 1.7 per cent for regular pay.
This followed significant falls in the months since April when wage growth was dampened by 80 per cent pay for furloughed employees and reduced or scrapped bonuses.
However, in real terms, total pay is growing at a slower rate than inflation, and from June to August 2020 it was negative, at -0.8 per cent, while regular pay growth was positive at just 0.1 per cent.
Total pay in real terms was estimated at £507 per week in August and remains below the £522 seen in February 2008, the highest pay level on record.
On the back of the figures, Laith Khalaf, financial analyst at AJ Bell, said: “Since October 2008, wage growth has averaged 2 per cent, and is flat after factoring in inflation. In other words, wages have gone nowhere in 12 years in real terms.”
The ONS figures also showed that unemployment rates have hit their highest level in three years, and redundancies rose to their highest level since 2009.
That data also looked bleak for those aged over 65, as it showed employment among this age group was 1.28m in the three months to August, which is 122,000 less than in the first three months of the year, a fall of 9 per cent.
The pensions industry has previously warned that a record number of over-65s will be forced to take early retirement if employment continues to fall.
Stephen Lowe, group communications director at Just Group, said: “Advisers have a crucial role to play in helping clients understand their options and finding some security and confidence when facing what may well be unexpected circumstances.”