Workers’ wages are rising at a faster rate than in previous months while the number of over-65s in employment has hit record levels, according to new figures from the Office for National Statistics (ONS).
Wages grew by an average of 2.9% in the three months to July, excluding bonuses. It means workers should finally start to feel a little wealthier as wage growth now outstrips inflation, which was 2.5% in July.
When wage growth beats inflation, workers should see the amount they can buy with their wages steadily increase.
The latest rise is also up from June’s growth of 2.7%. Workers now earn an average of £520 per week.
Check Moneywise’s wage calculator to see how inflation impacts your earnings.
August’s inflation figures are due to be published tomorrow.
Read more: How to get a pay rise in 2018
Over 65s employment boom
The latest ONS figures reveal the huge growth in over 65s in work in the last 12 years.
Since January 2006 the number of workers over the age of 65 has doubled from 607,000 to 1.26 million – a record high.
Helen Morrissey, pensions specialist at Royal London, says: “Today’s statistics show the phenomenal rate of growth in the number of people aged over 65 still in employment.
“This is due to many reasons, people are able to work longer because they are healthier and many want to remain in employment after the age of 65.
“Employers must continue to harness this valuable resource by providing working environments where older workers can thrive.”
Read more: How much cash would you need to quit work?
However Stephen Lowe, group communications director at Just Group, is more pessimistic: “It is positive to see the figures showing a rise in the number of older workers although we must be cautious because gains in the last three years have been a case of two steps forward, one step back.”
He explains: “At the start of 2015 the employment level for over 65s was just over 1.2 million compared to 1.26 million today. The underlying employment rate in that time has fallen from 10.8% to 10.7% indicating that only one in 10 over 65s are employed, a figure that has barely budged for five years.
“In the three years prior to 2015 there was a rise of nearly 300,000 in the number of workers aged 65 and over, a rise in the employment rate from 8.8% to 10.8%, which shows the relative weakness of growth more recently.”
Job creation slowing
Job creation more generally appears to be slowing. Pawel Adrjan, UK economist at job site Indeed, explains: “Economic gravity is inexorably catching up with Britain’s job creation boom, with employment up by only 3,000 in June compared to March.
“The economy is still creating new jobs - just. But the rate at which it does so has slipped from prodigious to ponderous.”
Mr Adrjan highlights why this could be good news for workers however, as employers appear to be struggling to fill roles.
He says: “With the unemployment rate remaining flat - at its lowest level for 43 years - and the number of EU nationals in Britain on the slide, the tightness of the labour market is finally starting to translate into higher wages.
“As the pool of available talent shrinks, employers are having to fight harder for every new recruit. Companies are tapping into the large number of people in part-time work who want to work more hours, and are notching up pay packets in an attempt to attract new staff.”