Get rich quick: Be a homeowner, shareholder or retired. Don’t be a worker.
Get rich quick: Be a homeowner, shareholder or retired. Don’t be a worker
- Wages of full-time employees are up by 2.2%, but the underlying picture is mixed
- Other groups and assets, such as house prices and property rental costs, are rising faster
- As a result, the need to save smarter is greater than ever
New figures from the Office for National Statistics1 show an increase in earnings of 2.2% for full-time employees, taking the median UK salary to approximately £28,000. This is the joint highest growth in earnings since the economic downturn in 2008.
A diverse underlying picture
However, the headline figure masks a diverse range of increases across different sections of society.
The data could be used to suggest that the strongest wage growth has been experienced by a young, female, low-earning, part-time worker living in the West Midlands. Similarly, the weakest wage growth has arguably been experienced by a middle-aged, male, higher-earning, full-time worker living in the North East.
By gender
|
| Wage growth 2015/16 |
| Full-time male | +1.9% |
| Full-time female | +2.2% |
By type of employment
|
| Wage growth 2015/16 |
| Full-time employee | +2.2% |
| Part-time employee | +6.6% |
By region
|
| Wage growth 2015/16 |
| Highest regional growth – West Midlands | +3.7% |
| Lowest regional growth – North East | +0.7% |
By level of earnings
|
| Wage growth 2015/16 |
| Bottom 5% | +6.2% |
| Top 5% | +2.5% |
By age2
|
| Wage growth 2015/16 |
| Highest age growth – 16-17 | +5.2% |
| Lowest age growth – 40-49 | +1.8% |
Wages relative to other groups and assets.
While a 2.2% increase in the earnings of full-time workers is encouraging relative to recent experiences, wages are still failing to keep pace with other groups and assets. House prices, property rental costs, state pensions and shares have all grown at faster rates.
|
| 12 month growth |
| Wages | +2.2% |
| House prices3 | +8.0% |
| Property rental costs4 | +2.3% |
| State pension triple lock | +2.5% |
| Shares5 | +13.7% |
Commenting on the latest wage figures, Alistair McQueen, Savings and Retirement Manager at Aviva said:
“We all welcome rising wages, but other assets are rising at a faster rate. Those not on the housing ladder, not in retirement or not able to invest in shares may find their relative wealth falling behind others in society.
“The spectre of rising price inflation may put additional pressure on wages in the year to come.6
“These dynamics raise the need for all of us to save smarter. At times like these, it is more important than ever to make sure our savings work as hard as possible, and to take advantage of the tax benefits uniquely associated with savings products like pensions and ISAs.
“Aviva has recently launched a new online tool called ‘Shape your future’ to help people plan for their retirement. Encouragingly, the tool was visited over 50,000 times in its first two weeks and it appears that many are already taking action to save smarter.”
You can see Aviva’s online ‘Shape your future’ tool here - https://www.retirementtools.aviva.co.uk/myfuture/ShapeMyFuture/LandingPage
Ends
If you are a journalist and would like further information, please contact:
Aviva Press Office: Fiona Whytock: 07800 692 299 or fiona.whytock@aviva.co.uk
Aviva’s retirement spokesperson Alistair McQueen, is available for comment/interview
Notes to editors:
- Aviva provides life insurance, general insurance, health insurance and asset management to 33 million customers, across 16 markets worldwide
- In the UK we are the leading insurer serving one in every four households and have strong businesses in selected markets in Europe, Asia and Canada. Our shares are listed on the London Stock Exchange and we are a member of the FTSE100 index.
- Aviva’s asset management business, Aviva Investors, provides asset management services to both Aviva and external clients, and currently manages over £319 billion in assets.
- Aviva helps people save for the future and manage the risks of everyday life; we paid out £30.7 billion in benefits and claims in 2015.
- By serving our customers well, we are building a business which is strong and sustainable, which our people are proud to work for, and which makes a positive contribution to society.
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[1] Source: ONS Annual Survey of Hours and Earnings, 2016 https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2016provisionalresults
[2] Source: Aviva averaging of ONS wage increases across genders by age
[3] Source: ONS House Price Index, August 2016 http://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/aug2016
[4] Source: ONS Index of Private Housing Rental Prices, August 2016 http://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/indexofprivatehousingrentalprices/aug2016
[5] Source: FTSE 100 Total Return http://uk.investing.com/indices/ftse-100-total-return
[6] Source: ONS UK Consumer Price Index: http://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/sept2016