UK take-home pay is falling for the first time in more than three years
Key Points
- UK households reported the first fall in employment income in 40 months during August 2026.
- The income from employment index dropped to 48.7 from 50.7, the steepest decline since March 2023.
- Job insecurity reached its highest level in nearly three-and-a-half years.
- Only IT/Telecoms recorded a pay rise, while most sectors saw take-home pay fall.
- The headline Consumer Sentiment Index slipped to 42.9 from 43.4.
UK households reported a fall in employment income in August – the first reported drop in some 40 months.
The income from employment gauge in the S&P Global UK Consumer Sentiment Index dropped to 48.7 from 50.7 in July, with any reading below 50 signalling a decline.
The fall was modest but the steepest since March 2023, and it ended a run of uninterrupted growth that was the longest since the survey began in early 2009. S&P Global Market Intelligence collects the survey monthly from a panel of 1,500 UK households, with August’s responses gathered between 6 and 10 August.
Job insecurity hit its highest level in nearly three-and-a-half years over the same month.
Households in almost all five tracked income groups felt less secure than in July, with the highest-earning cohort the only exception. The labour market sentiment index slid to 48.8 from 49.4, a 41-month low and a third consecutive month of pessimism.
The data on pay shows a mixed bag based on sector. Workers in IT/Telecoms recorded a rapid but slower rise in pay, while earnings in Utilities/Energy held broadly unchanged. Wage growth stalled in Construction, and every other sector reported a decline in take-home pay.
Workplace activity rose for a fourth straight month and reached its highest level since May. Utilities/Energy posted the strongest gain after several months of weakness, followed by IT/Telecoms, where demand for technology-related roles remained robust.
The sector continues to outperform its peers on the back of AI-driven investment and spending.
“The recent better growth seen in the economy is failing to feed through to households. The latest survey shows labour market concerns emerging as a growing drag on consumer confidence. Job insecurity is now at its highest in nearly three-and-a-half years, with incomes falling for the first time since April 2023,” said Maryam Baluch, Economist at S&P Global Market Intelligence.
The headline Consumer Sentiment Index fell to 42.9 in August from July’s four-month high of 43.4.
The 2026 average so far points to the weakest consumer sentiment since 2023. S&P Global publishes the next reading on 21 September.
