Reading tops the list of cities where wages have fallen the furthest behind inflation

Research by Capital on Tap has compared average wages across major UK cities to track how the cost of everyday goods and services changes over time. The analysis shows where real earnings are falling furthest behind and which regions are under the greatest financial strain.

The data showed that Reading tops the list of where wages have fallen the furthest behind inflation over the past decade, signalling just how deeply the cost-of-living crisis has taken root beyond London. Average pay has risen by 18.21% between 2014 and 2024, but with CPI inflation soaring 36.9%, workers have effectively seen a 13.63% loss in real earnings.

Workers in Reading are effectively worse off in real terms. A worker earning £30,000 in 2014 would need around £41,000 in 2024 just to maintain the same standard of living, as prices have risen significantly. With wages only increasing by around 18%, that £30,000 salary is worth roughly £35,460 today, leaving a real‑terms shortfall of more than £5,500. Although nominal pay has risen, income has not kept pace with the rising cost of living, thereby reducing overall spending power.

Southend-on-Sea comes in second, where wages have struggled to keep up with rising prices, climbing 20.3% over the past decade against inflation’s surge. This widening gap highlights the mounting financial strain on coastal towns, where many industries rely on tourism and service jobs with limited scope for wage rises.

England’s capital, London, rounds out the top three. Despite typically higher salaries, pay in the city has struggled to match the soaring cost of living. Wages have risen by 24.54%, yet once inflation is factored in, Londoners are still 9% worse off in real terms, a notable setback given the capital’s already high housing, childcare, and transport costs.

Rebecca Alford, Chief Financial Officer at Capital on Tap, said “Across the UK, the data paints a worrying picture of pay failing to keep pace with rising prices. Real wages have eroded even in cities with stronger economies, leaving employees with less spending power. The squeeze on disposable income doesn’t just affect individuals; it limits local economic growth, challenges recruitment, and puts additional pressure on employers to find new ways to retain staff in an increasingly competitive labour market.”

The UK cities struggling to keep wages up with inflation: