The typical pre-tax salary before those working full-time has smashed the £40,000-a-year barrier for the first time, official findings show.
Average annual earnings for full-time employees were £40,911 in the year to April 2026, data from the Office for National Statistics (ONS) reveal.
But as pay increases and income tax thresholds stay the same, many more people face higher taxes on their pay.
Average full-time weekly earnings were £811.20 by the end of the period, up 5.8 per cent in a year, while average part-time weekly earnings were up 2.9 per cent to £288.10 in April 2026, the figures show.
The median full-time annual pre-tax salary in Britain increased by 4.5 per cent, a slight fall from 4.6 per cent in the previous period – and also the most sluggish rate since 2021.
Full-time weekly earnings rose fastest for managers, up 6.7 per cent, and slowest for factory workers, up 4.1 per cent.
For women the average full-time pre-tax pay was £37,471, while for men it was £43,934, the ONS said.
The gender pay gap for full-time workers, which does not account for differences in occupation, experience or qualifications, narrowed to 6.8 per cent from 7.2 per cent.
In April 2026, the highest proportion of low-paid employees was found in the hospitality industry and among employees aged 16 to 21 years, according to the ONS.
Staff earning high pay were concentrated in managerial and professional occupations, information and communication, finance and insurance, and among employees aged 45 to 49 years.
The ONS said early estimates for September 2026 indicated that median monthly pay was £2,660, an increase of 4.4 per cent compared with the same period a year ago.
Back in September 2014, the figure was £1,404 a month.
The ONS added: 'A series of lower median pay growth figures were observed in late 2025, likely influenced by the timing of public sector pay settlements having differed from the previous year.'
Bank of England policymakers typically view pay growth markedly above 3 per cent as a sign they face a tougher time getting inflation back to their 2 per cent target.
The national minimum wage is the lowest amount employees can legally be paid, and it normally rises every year.
In April 2026, Labour increased the minimum wage for people aged 21 and over to £12.71 an hour, up 50p from £12.21.
For those aged between 18 and 21, minimum wage rates increased to £10.85 an hour – up 85p from £10
Chancellor John Healey is expected to announce the next minimum wage increase in his Budget on October 28.
Chancellor John Healey is under pressure to act on frozen income tax thresholds
Watch out for frozen income tax thresholds
Data about pay rises may appear to spell good news, but an ever-growing number of people are being dragged into higher income tax rates as tax thresholds remain frozen.
Tax thresholds have not kept up with the cost of living, since former Chancellor Rishi Sunak froze them at 2021 levels at the tail end of the pandemic – and were then frozen for even longer by Rachel Reeves.
Before, most thresholds used to rise in line with consumer price index inflation.
Crucially, as people's nominal earnings increase relative to tax thresholds, more of their income is taxed.
The resulting 'fiscal drag' is set to raise significant sums for the Treasury's coffers as the average effective tax rate, or the total tax paid as a share of total income, increases more quickly over time.
The current personal allowance most people have is £12,570. This is how much money most people can earn before income tax kicks in.
Recent analysis by Standard Life found the personal allowance would stand at £16,072 in 2026/27 had it kept pace with inflation, which would be £3,502 higher than it is now.
And the higher-rate threshold would be £64,274, rather than £50,270.20
In August, Standard Life said the frozen personal allowance added £700.36 to the annual income tax bill of a basic-rate taxpayer who uses the allowance in full.
For someone earning above the inflation-adjusted higher-rate threshold, the combined impact of both frozen thresholds is £3,501.22, it added.
One in six people have hesitated or refused a pay rise, bonus or promotion because they were concerned that higher taxes or lost allowances could reduce the financial benefit, Standard Life claims.
More than a fifth of people said they would consider turning down a pay rise if it meant they would have to pay a higher rate of income tax, Standard Life's findings showed.
Sarah Coles, of AJ Bell, said: 'The average full-time wage has broken through £40,000 for the first time, after weekly pay rose 5.8 per cent in a year.
'This isn't the full picture though, because after inflation, full-time pay was up just 2.7 per cent.
'It means millions of people are getting pay rises which do little more than keep up with rising prices. However, this doesn't stop them from being clobbered by higher taxes.'
She added: ''The real kick in the teeth is that income tax thresholds have remained frozen for the entire period.
'The number of people paying income tax has risen from 33million in the 2021/22 tax year to an estimated 39.8million by 2025/26 – up 6.8million in that time.
'At a more granular level, the number of basic rate taxpayers increased by 3.5million, the number of higher rate taxpayers is up by around 2.9million, and the number of additional rate taxpayers is up 700,000.'