Earnings in Scotland 2022: The rise of inflation

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This blog looks at the latest data from the Annual Survey of Hours and Earnings for Scotland. We will look at the latest data and the impact of the pandemic and the cost crisis on the data.

About the data

The data for ASHE is collected in April every year. Pay As You Earn (PAYE) data is first used to identify representative subgroups of employers and employees. This group is then surveyed to get information on employee hours and earnings. As the data is based on PAYE it does not include the self-employed.

The 2020 and 2021 data were impacted by the pandemic. We have discussed this in more detail but there are three main areas to consider when looking at the data:

  • The impact of the Coronavirus Job Retention Scheme (CJRS): At the time of the survey in 2020 and 2021, millions of employees were on furlough.  This means that many employees saw their income fall by 20 per cent, as the CJRS only supported 80 per cent of an employee’s wages.
  • Job insecurity for low-paid jobs: lower-paid people were at greater risk of losing their jobs during the pandemic. Fewer lower-paid people in the workforce will increase the average earnings for those who remained in work.
  • There was a decreased response rate for the survey: This mean the ASHE estimates for 2020 and 2021 are subject to more uncertainty than normal.

Due to these issues the ONS recommend focussing on long-term trends rather than year-on-year changes. Therefore, we have provided data from 2018 onwards when looking at changes over time.

The main measure we use is “median gross weekly pay for all employees”. We use the median, the middle value of the data, as it is more representative of typical pay.  This is because a mean or average can be affected by a small number of high earners, increasing the value. By taking the median, 50 per cent of employees earn less and 50 per cent earn more than that figure.

We also look at the figure for all employees instead of full-time employees as, according to the latest available data, 88 per cent of people in Scotland work full time. In addition, there is a 60-40 split between men and women for full time employees. So, by looking at all employees we can control for sex and working patterns.

Latest data

The data shows that in Scotland, in April 2022, median gross weekly pay was £528. This is just below the UK figure of £532 and is fifth highest of the nations and regions of the UK.

A horizontal bar chart showing the median gross weekly pay in April 2022 for each nation and region of the UK. Ranked from highest to lowest.

The impact of inflation

One of the biggest current issues is high inflation. The figures used when quoting growth in inflation are from the Consumer Prices Index including owner occupiers’ housing costs (CPIH). CPIH is the inflation measure used to adjust earnings data into real terms figures. At the time of the ASHE survey, CPIH had increased by 7.8 percent compared to April 2021, which was the highest annual increase since 1982, however, this has since been surpassed. The major contributor to the increase was housing and household services, which was as a result of the increase in the energy costs.

Real terms wages across the UK

As discussed, due to issues with the survey it is recommended to look at the data over a longer period than just comparing to last year. While we should be careful looking at the change between 2021 and 2022, all nations and regions of the UK have seen a fall in weekly pay. Looking at the change since 2019 in Scotland, real terms weekly pay is 1.5 percent higher than in 2019, compared to an increase of 0.5 percent for the UK.

Twelve line charts showing the real terms value of median gross weekly pay for all employees from 2018 to 2022. Each chart also contains the figure for the UK for comparison.

Real terms wage by income level

So far, we have looked at median pay. ASHE data also provides breakdowns in the earnings data which split the data into smaller pieces. We will now look at the impact of inflation on the bottom 10 per cent and 25 per cent, and the top 25 per cent and 10 per cent, of earners.

Looking at the pay for the bottom 10 per cent of earners, in Scotland this fell by 2.9 percent between 2021 and 2022, but looking over the longer term, between 2019 and 2022, it increased by 4.7 per cent in real terms. This means that currently 10 per cent of employees in Scotland earn £182 or less per week, compared to £174 or less per week in 2019.

Despite high inflation, the bottom 25 percent has seen little change between 2021 and 2022, with pay increasing 0.3 percent in Scotland, and falling 0.1 percent in the UK overall in real terms between 2021 and 2022. Between 2019 and 2022 the earnings for the bottom 25 percent increased by 6.7 percent in Scotland, and by 5.7 percent in the UK. This means that currently 25 percent of employees in Scotland earn £359 or less a week, compared to £336 or less a week in 2019.

For the top 25 per cent of workers, in Scotland the figure has increased by 0.8 per cent in real terms between 2019 and 2022, compared to a fall of 5.7 per cent in the UK overall. Looking at the top 10 per cent of earners in Scotland and the UK, real terms weekly income is currently below the 2019 figure.

Two line charts side by side showing the real terms value of gross weekly pay by income level for Scotland and the UK between 2018 and 2022.


Recent high inflation has impacted on real terms growth in wages across the UK. While Scotland has done better than the UK overall, the growth of 1.5 per cent in real terms median gross weekly pay between 2019 and 2022 will still result in challenges, as 50 per cent of employees must rely on £528 or less a week. The bottom 10 per cent of earners have only around a third of median income. The low increase in pay of the top 25 per cent would suggest that there is also slower wage growth in higher paid jobs.

With inflation rates not estimated to start falling until the middle of 2023, real terms growth in income is unlikely for some time.

Andrew Aiton, Data Visualisation Manager, SPICe