Wages fall as earnings peak delayed
15 Jul 2014
The Institute for Fiscal Studies (IFS) has released figures showing that average incomes fell by 10% between 2007/08 and 2012/13.
Young adults in their 20s saw the biggest dip, with an average wage reduction of 13%, while the 31-59 age group was the least hard-hit with a comparatively low wage decrease of 7%.
Jonathan Cribb, research economist at the IFS, said: ‘Young adults have borne the brunt of the recession. Pay, employment and incomes have all been hit hardest for those in their 20s. A crucial question is whether this difficult start will do lasting damage to their employment and earnings prospects’.
In another report, the Office for National Statistics (ONS) said that workers now reach their earnings peak at the age of 38 – a delay of nine years compared to the same study in the 1970s, when average peak income was reached at 29.
When broken down, the report shows that the average peak income for a woman is £13.19 per hour at the age of 34, while the average peak income for a man is £15.54 per hour at the age of 50.
Individuals in their 20s will have to wait longer for their peak, but the report does show that in real terms the average income has increased significantly since the 1970s, despite the sharp decline in recent years.