Money Talk: Average forecourt pay rates rise by 1.3%

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As we’ve been doing every year since 1998, we’ve once again taken the payroll data that PAYEPeople processes on behalf of hundreds of forecourt operators across the UK to find the real pay rates that were being paid to nearly 6,000 individual hourly-paid employees, giving a true snapshot of what’s being paid.]

Not what people claim to pay, or receive, but the actual hourly pay rates calculated for each individual site operator and employee.

For the sake of consistency, we perform the calculations using source data from the same month each year September.

The data is then split by geographic region and we work out the national and regional average pay rates. For clarity, please note that these figures are taken from forecourts across the independent sector (dealer-owned and/or commission-operated sites) and do not include any supermarket/hypermarket operated forecourts.

A year ago:

UK average forecourt hourly pay rate September 2013 was £6.40 per hour

RPI (Sept 2013) = 251.9

Adult minimum wage rate was £6.19/hr (18-20 rate was £4.98/hr).

September this year:

UK average forecourt hourly pay rate September 2014 = £6.48 per hour

RPI (Sept 14) = 257.6

Adult minimum wage rate was £6.31/hr (18-20 rate was £5.03/hr).

over 12 months, the changes amounted to:

Average forecourt hourly pay increased by 1.3%

Retail price inflation increased by 1.8%

Statutory minimum wage rate (over-21s only) increased by 1.9%.

Looking at individual regions, and starting with the top-paying area, the results looked like this (last year’s figures in brackets):

South East England (excl Greater London) £6.63 (£6.38) +3.9%

North West England £6.53 (£6.41) +1.9%

South West England £6.46 (£6.36) +1.6%

Midlands £6.46 (£6.47) -0.2%

Greater London £6.45 (£6.36) +1.4%

Scotland £6.45 (£6.32) +2.1%

Wales £6.45 (£6.37) +1.2%

North & North East England £6.39 (£6.29) +1.6%

Eastern England/ East Anglia £6.38 (£6.35) +0.5%

Northern Ireland £6.37 (£7.09) -10.2%

The individual regional results showed a few oddities as they often do. In this instance, we’ve seen Northern Ireland drop from top place last year to bottom this year; the sample sizes there are really too small to draw any conclusions, other than that we were surprised last year and had half-expected that result to have been a one-off!

The only other region to show an apparent fall in rates over the past 12 months was the Midlands, but in that case the decrease was tiny, and still leaves that region virtually bang in-line with the current national average.

The spread of results around the national average ranged from a low of £5.46/hr from one employer in the South West to a high of £7.81/hr from one in the Midlands.

However, the general picture from this year is that there was really very little in the way of regional deviation from the mean. All regional averages fell within the range +/-15p per hour either side of the national average.

At this stage, it’s probably worth repeating the answer to one question that we hear almost annually: if the headline National Minimum Wage was ’£6.31’ how come we see individual employer averages ranging from £6.30 to £5.46?

The simple answer is that the headline rate is for workers aged 21 and above, but there are many forecourts employing students during university/college holiday-time (which for many students includes September) and many of those are in the lower (18-21) age range for whom the National Minimum Wage was only £5.03 at the time. Hence the individual site averages can vary quite considerably depending on the age mix of the employees at each site.

The overall results are pretty much in line with every other earnings report produced in recent months. Yes, there’s a very gradual rise in earnings, but it’s still below the general rate of price rises and let’s not forget that the inflation rate for September 2014 was one of the lowest in a long time and hence ’real’ wages are still falling.

Looking back at our own historic figures, the average hourly rate in September 1998 was £3.76 an hour. It broke the £4 level in 2000, taking another five years to exceed £5/hr, and it was 2010 before exceeding £6/hr.

The current trend suggests that it will take somewhat longer than five years to hit £7/hr.

Of course, as every employer is aware, hourly gross pay isn’t the only cost attached to each employee. Each Chancellor has the tendency to ’adjust’ hidden costs such as employers’ National Insurance contributions, and in the near future there will undoubtedly be increased employer pension contribution costs as Auto Enrolment work its way through the industry over the next couple of years.

While employees can justifiably claim to be feeling the pain of eroded real take-home pay, employers will also be looking at rising costs of employment and quite rightly claiming that they can’t afford to do much to remedy that situation.