How the pay rise for public sector workers compares to people in the private sector

Millions of public sector workers were this week offered pay rises of between 5-7% in the coming months.

Teachers have been offered an increase of 6.5%, junior doctors, consultants and dentists 6% and police and prison officers 7%.

These awards apply to those working in England and Wales, with devolved administrations making separate offers to their staff.

Senior civil servants will receive 5.5%, while military personnel are in line for an increase of 5-6%, which will apply UK-wide.

Read more: What the public sector pay rises announced by Government mean for strikes, budgets and inflation

The government has ruled out paying for the pay rises with more borrowing or taxes, saying it will be funded from current budgets.

The government hopes the offers will put an end to the wave of strikes that have plagued the public sector for the past year, with several unions already indicating they will accept the offer.

How does it compare to the private sector?

Rishi Sunak has described the pay award as the government's final offer.

However, workers' new pay increase will still be way below the current inflation level of 8.7% - meaning despite the new offer everyone will still be getting a real terms pay cut.

Plus, if the average public sector pay works out at an average of 6.5%, it will still be behind the average for the whole economy.

Charlie McCurdy, economist at the Resolution Foundation, told Yahoo News UK: "Pay growth in the private sector has outstripped the public sector for several years, and we're seeing the effects of this as schools and hospitals struggle to recruit and retain staff."

The latest figures by the Office for National Statistics showed average wage growth was 7.3% between March and May 2023.

This was driven by 7.7% growth in the private sector and just 5.8% in the public sector.

This data does not factor in the most recent offer, which will not be applied until the start of the financial year - but it doesn't seem like it will be enough to close the gap.

As McCurdy pointed out: "The latest pay settlement will help to address this imbalance – as well as reducing industrial action – though huge questions remain about the future funding of public services and public servants."

Last month, the Resolution Foundation noted that, since January 2022, wages in the private sector have been consistently increasing from around £550 a week to £600 in April 2023.

But in the public sector wage growth has plateaued, it rose steadily from January 2022 to the middle of the year before rising sharply in the final six months of 2022.

Public sector wages are now in line for another sharp growth, but it is yet to be seen if this will catch up with the private sector.