London pay still outpaces rest of UK as regional wage gap persists

Londoners are earning nearly £200 more per week than workers in the North East, according to the latest figures from the Office for National Statistics (ONS). The new data confirms that regional pay inequality remains deeply entrenched, despite steady wage growth across much of the UK.

The ONS figures, based on April 2024 data, show that full-time employees in the capital earn a median of £853 per week, while those in the North East take home £661. That £192 difference represents a 29 per cent gap between the UK’s top- and bottom-earning regions — a disparity that has barely shifted in recent years.

Across the country, the median weekly pay for full-time employees is £728. Workers in southern England continue to out-earn much of the rest of the UK, with the South East (£779) and East of England (£764) ranking just behind London. At the other end of the scale, the lowest earnings were recorded in Yorkshire and the Humber (£675), Northern Ireland (£671), and the North East (£661).

Regional differences remain stubbornly wide

While pay has risen across all areas of the UK over the past year, the pace of growth has done little to narrow regional divides. London’s strong performance continues to reflect its concentration of financial services, technology and professional roles, while regions in the North and devolved nations remain more reliant on sectors with lower average pay.

The figures suggest that structural factors — rather than short-term economic shifts — continue to shape pay inequality. According to analysis by financial planning firm Capital for Life, these include industry mix, cost of living and the distribution of senior and specialist roles.

Carlton Crabbe, a finance officer at Capital for Life, said understanding these differences was key to making sound financial and career decisions. He said while pay levels were influenced by individual factors such as role, experience and age, geography remained a major determinant of earning potential.

“Even similar roles can offer very different salaries depending on where in the country they are based,” Crabbe said. “Regional differences are largely influenced by industry concentration and the cost of living. Areas such as London and the South East tend to have higher average salaries due to the presence of financial, technology and professional service hubs, as well as higher housing and commuting costs.

“In contrast, regions with fewer high-paying industries or lower living expenses naturally report smaller average pay packets.”

Crabbe added that awareness of the patterns helped individuals to plan their budgets and evaluate career opportunities, particularly as the cost of living continues to fluctuate across the UK.

London’s premium remains, but pressures mount

The persistence of the pay gap highlights the difficulty of levelling up regional economies. Although London’s wages remain higher than elsewhere, the capital also faces the UK’s highest living costs. According to ONS data on inflation and household spending, the cost of accommodation, transport and childcare continues to offset much of the capital’s salary advantage.

Some economists suggest that hybrid working trends could eventually help distribute high-earning roles more evenly. With many professional and digital jobs now less tied to location, employers are increasingly recruiting talent from outside London and the South East. But the latest figures show it has yet to make a significant dent in the long-standing regional pay divide.

The ONS data also reveals variation between sectors. Public sector pay tends to be more uniform across regions, reflecting nationally agreed pay scales. But even within public services, London weighting allowances contribute to higher median earnings in the capital.

In the private sector, pay differences are driven more sharply by market demand and sector composition. The South East benefits from a high share of financial, legal and scientific roles, while regions such as the North East and Northern Ireland continue to have a larger proportion of employment in manufacturing, retail and care services, which typically pay less.

Need to review salaries

The enduring pay gap raises strategic questions around recruitment, retention and reward policy. Businesses operating across multiple regions may need to reassess salary structures to remain competitive, particularly as flexible work allows employees to compare offers nationally.

Pay transparency initiatives and benchmarking data are also becoming increasingly important in shaping equitable remuneration practices. Employers are expected to balance regional market rates with fairness and affordability, especially where remote roles blur traditional boundaries.

The figures may also influence internal discussions on cost-of-living support and regional supplements. With inflation and housing costs continuing to vary widely, organisations are under pressure to ensure that employees across locations can maintain comparable living standards.

A long-term challenge

Despite government ambitions to rebalance the economy, progress in narrowing the pay gap has been limited. ONS data over the past decade shows that London’s earnings have consistently outpaced the national average by 15–20 per cent.

Economists point out that sustainable change is likely to require greater investment in skills, transport and infrastructure in underperforming regions, alongside the expansion of higher-value industries beyond the South. And while wage growth has provided some relief for workers nationwide, the 2024 figures confirm that regional inequality remains one of the defining features of the UK labour market.

As Crabbe from Capital for Life put it, understanding these disparities is vital for both individuals and policymakers. “Awareness of how salaries differ across the UK is an important step towards making informed financial decisions and protecting financial wellbeing in a changing economy,” he said.