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The Employment Rights Act introduces major reforms to UK employment law, with changes being implemented in stages from December 2025 through to 2027.

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Pay Facts

Issue date

18 Mar 2015

Pay and living standards are at the top of the political agenda. The TUC’s Britain needs a pay rise campaign has been getting our message out. This briefing sets out some of the key facts about what’s happening to pay.

Workers are £2,500 worse off in real terms than they were in 2010.

Even though inflation has fallen in recent months it is going to take years for wages to recover to their pre-recession levels. We can’t rely on low oil prices to deliver higher living standards – sustainable increases in household budgets rely on higher rates of pay growth (which are still well below pre-crisis trends).

Top directors’ pay has gone up by 26 per cent in real terms since the crash.

While average wages have plummeted since 2010, pay packets for FTSE 100 CEOs have gone up by £700,000 in real-terms since the last election. The average FTSE CEO earns 123 times the average wage.

5.2 million workers earn below the living wage

One in five workers earn below the living wage and in some parts of the country this rises to one in two. Poverty pay is becoming more entrenched.

We are creating too many low-paid jobs, especially for women

Since 2010, 50 per cent of the net growth in women’s jobs has come from low-paying industries.

The increase in zero-hours contracts and casual labour is creating a two-tier workforce.

Zero-hours workers earn £300 a week less on average than workers on permanent contracts. Two in five zero-hours workers earn less than £111 a week and do not qualify for statutory sick pay.

Wage stagnation has created a £33bn tax shortfall.

According to the Office for Budget Responsibility the UK is facing an income tax and national insurance shortfall despite rising employment levels. The OBR say this is due to the numbers of people going into relatively low-paid work and the sharp growth in self-employment, much of which is poorly paid. Analysis by the IPPR for the TUC shows that poor performance on wages will leave the Exchequer over £33bn worse off this financial year than would have been the case under their 2010 plans.

Household debt is forecast to grow nearly three times faster than wages over the next parliament.

Even more strikingly, unsecured household debt is forecast to grow 4.5 times as fast as wages – by 70 per cent between 2015 and 2019. It will reach an average of around £29,000 of unsecured debt per household by 2019.

Household debt will be nearly £1 trillion higher under George Osborne’s plans

The OBR says that under the Chancellor’s economic plans household debt will rise by 61 per cent over the next parliament and nearly trillion higher than it was before the last financial crash. The Chancellor is stoking up another debt bubble.

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