Regular pay has seen its biggest fall in more than 20 years, taking into account rising prices, the Office for National Statistics said.
Real wages – a measure of regular wage growth when inflation is taken into account – fell by 3.7% from March to May, the ONS said.
It was the worst year-on-year decline since records began in 2001.
“Following the recent rise in inflation, pay is now clearly falling in real terms, both with and without bonuses,” said David Freeman, head of labor market and household statistics for the ONS.
UK household spending power is falling due to skyrocketing fuel and energy costs.
Real wages fell by 3.5% in the year to May – an improvement on April’s figure of 4.5% but still worse than at any other time on record.
The employment rate remained below pre-pandemic levels, although it rose 0.4 percentage points to 75.9%.
Although the number of people neither working nor looking for work is now falling, it remains well above what it was before the impact of COVID-19.
“With the demand for labor still very high, unemployment fell again, employment rose and there was a new record low number of layoffs,” Mr Freeman said.
DWP minister Julie Marson said it was “fantastic news” that the UK now had two million more women in work than in 2010, adding that the latest OECD figures showed the country had the second highest level of working women women in the G-7.
“As we grow the economy, it’s vital that we make sure everyone can find a job that’s right for them – and importantly, that they can progress in work,” she said.
“That’s why we’re continuing to support to get people of any age or career stage into work, including a new multi-million pound bid to help over-50s find and stay in work.”
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