High-paid workforce shrinks to record low

Proportion of those on more than £53,500 falls to 23pc as Reeves prepares minimum wage pay rise

Britain’s high-paid workforce has shrunk to a record-low, official data shows, as the Chancellor prepares to hand minimum-wage employees an inflation-busting pay rise.
The share of high-earning employees in the labour market has fallen to the lowest level since at least 1997, according to the Office for National Statistics (ONS).
High-earners now account for just 22.7pc of the UK workforce, a decline from a high of 26.4pc last reached in 2012.
The fall in high-paid jobs comes as workers brace for a tax grab in Rachel Reeves’s maiden Budget targeting those with the “broadest shoulders”, despite Labour’s manifesto pledges promising to shield “working people”.
She will simultaneously raise the National Living Wage by 6.7pc from next April, with some younger workers getting pay rises as large as 18pc.
The declining share of high-earners has accelerated in recent years amid high inflation and a round of mass lay-offs in the technology and banking sectors.
The ONS describes someone earning 1.5 times the median wage as a high-earner, meaning they make at least £25.63 an hour or around £53,450 annually if working full-time.
Luke Hildyard, of the High Pay Centre, said employers protecting lower-paid staff during the cost of living crisis had likely driven some of the fall.
He said: “We have had a period of intense pressure on cost of living and employers may have understandably sought to prioritise pay increases for lower-earners struggling to cover essentials like food, clothing, energy bills and rent.”
Over the same period the lower-paid workforce has also plunged, falling to 3.4pc of employees in 2024 from 9.8pc last year. In 2002, lower-paid workers earning less than two thirds of the median salary made up 22pc of the jobs market.
The ONS defines this group as those earning less than £11.39 an hour, equivalent to around £23,750 a year full-time.
Describing someone earning just shy of £50,000 as highly paid “is not what most people would have in mind when they think of a high-earner”, Mr Hildyard warned.
He said: “For so-called high-earners who actually aren’t so far above the middle of the earnings distribution, policymakers certainly should and would want their pay to be growing, along with those in the middle and at the bottom.”
ONS data shows that people in jobs including social care and customer service have seen the biggest pay rises, ahead of professionals and managers, directors and senior officials.
Jack Kennedy, senior economist at Indeed, said: “We have seen quite subdued pay increases in higher-paid categories, at least in the last two or three years. A lot of the wage growth is driven by the bottom end of the market.”
The Chancellor is also expected to extend stealth levies like freezing income tax brackets and raising employers’ National Insurance contributions, often described as a tax on jobs.