Table of contents
- Other pages in this release
- Main points
- Pay As You Earn Real Time Information
- Employment, unemployment and economic inactivity
- Hours worked
- Redundancies
- Vacancies
- Earnings growth
- Coronavirus and measuring the labour market
- Labour market data
- Glossary
- Measuring the data
- Strengths and limitations
- Related links
1. Other pages in this release
2. Main points
The latest three months to February 2021 recorded small increases in the number of payroll employees although since February 2020, the number of payroll employees has fallen by 693,000 with the largest falls seen at the start of the coronavirus (COVID-19) pandemic. Analysis by age band shows that under 25s contributed over 60% of the fall seen since February 2020.
Special analysis of new data using payroll employees and Migrant Worker Scan data shows a small fall in the number of non-UK nationals in employment last year.
Data from our Labour Force Survey (LFS) show the unemployment rate continued to increase, though the increase is smaller than in recent periods, while the employment rate continued to fall. There was an increase for people who are economically inactive, largely driven by people who are inactive because they are students.
Although total hours worked continued to increase from the low levels in the previous quarter, this increase slowed in the latest quarter. The number of people temporarily away from work because of the pandemic and receiving no pay has fallen since its peak in April and May 2020, although it has increased slightly over the last three months.
The number of job vacancies in December 2020 to February 2021 was 26.8% lower than a year ago. This is an improvement on the position in summer 2020 when vacancies were down by nearly 60% year on year, but the rate of improvement has slowed in the past few months. Further restrictions and national lockdowns recently have had an impact on vacancies in some industries more than others, most notably the accommodation and food services industry.
Annual growth in average employee pay continued to strengthen, the growth is driven in part by compositional effects of a fall in the number and proportion of lower-paid employee jobs and by increased bonuses, which had been postponed earlier in the year.
693,000 fewer people were in payrolled employment in February 2021, when compared with February 2020.
68,000 more people were in payrolled employment in February 2021, when compared with January 2021; this is the third consecutive monthly increase.
The UK employment rate, in the three months to January 2021, was estimated at 75.0%, 1.5 percentage points lower than a year earlier and 0.3 percentage points lower than the previous quarter.
The UK unemployment rate, in the three months to January 2021, was estimated at 5.0%, 1.1 percentage points higher than a year earlier and 0.1 percentage points higher than the previous quarter.
The UK economic inactivity rate was estimated at 21.0%, 0.6 percentage points higher than a year earlier and 0.3 percentage points higher than the previous quarter.
The redundancy rate, in the three months to January 2021, was estimated at 11.0 people per thousand employees.
There were an estimated 601,000 vacancies in the UK in December 2020 to February 2021; this is 220,000 fewer than a year ago and the rate of increase in vacancies has slowed strongly in recent months.
Growth in average total pay (including bonuses) among employees for the three months November 2020 to January 2021 increased to 4.8%, and growth in regular pay (excluding bonuses) increased to 4.2%; it is estimated that by removing the compositional effect, the underlying wage growth is around 3% for total pay and around 2.5% for regular pay.
3. Pay As You Earn Real Time Information
Experimental data on the number of payroll employees and median earnings, using HM Revenue and Customs' (HMRC's) Pay As You Earn (PAYE) Real Time Information (RTI), also show current labour market conditions.
Early estimates for February 2021 indicate that there were 28.3 million payrolled employees, a fall of 2.4% compared with the same period of the previous year and a decline of 693,000 people over the 12-month period (Figure 1). Compared with the previous month, the number of payrolled employees increased by 0.2% in February 2021 – equivalent to 68,000 people.
Figure 1: The number of employees declined between February and November 2020, but has risen slightly more recently
Payrolled employees, seasonally adjusted, UK, July 2014 to February 2021
Source: HM Revenue and Customs – Pay As You Earn Real Time Information
Notes:
- The latest period, highlighted in orange, is based on early data and therefore is more likely to be subject to slightly more significant revisions.
- The January 2021 figure is not a flash estimate of payrolled employees, this is included purely for graphing purposes.
Download this chart Figure 1: The number of employees declined between February and November 2020, but has risen slightly more recently
Image .csv .xlsOf the 693,000 decrease in payrolled employees since February 2020, 368,000 can be attributed to employees working in the accommodation and food service activities sector, 123,000 in the wholesale and retail trade sector, while only 1,000 can be attributed to employees working in the construction sector. This decrease is net of an increase of 43,000 employees working in public administration, and 132,000 employees in health and social work.
Looking at the annual decrease by age-band, 437,000 (63.1%) were under 25 years, 174,000 (25.2%) were aged 25 to 34 years and 109,000 (15.7%) were aged 35 to 49 years. Only 5,000 (0.7%) were aged 65 years and over. This decrease is net of an increase of 32,000 aged 50 to 64 years.
Early estimates for February 2021 indicate that median monthly pay increased to £1,930, an increase of 3.9% compared with the same period of the previous year.
Back to table of contents4. Employment, unemployment and economic inactivity
LFS responses are weighted to official 2018-based population projections on demographic trends that pre-date the coronavirus pandemic. In our Coronavirus and the impact on payroll employment article we analyse the population totals used in the LFS weighting process and state our intention to make adjustments. Rates published from the LFS remain robust; however, levels and changes in levels should be used with caution. This will particularly affect estimates for country of birth, nationality, ethnicity and disability.
Figure 2: In the three months to January 2021, estimates show a smaller increase in the unemployment rate than recent increases, while the employment rate continued to fall
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UK employment, unemployment and economic inactivity rates, seasonally adjusted, between November 2005 to January 2006 and November 2020 to January 2021
Employment
Employment measures the number of people aged 16 years and over in paid work and those who had a job that they were temporarily away from. The employment rate is the proportion of people aged between 16 and 64 years who are in employment.
For people aged between 16 and 64 years, for November 2020 to January 2021:
the estimated employment rate for all people was 75.0%; this is 1.5 percentage points down on the same period the previous year and 0.3 percentage points down compared with the previous quarter (August to October 2020)
the estimated employment rate for men was 78.2%; this is 2.3 percentage points down on the same period the previous year and 0.3 percentage points down on the quarter
the estimated employment rate for women was 71.8%; this is 0.7 percentage points down on the same period the previous year (the largest annual decrease since October to December 2010) and 0.3 percentage points down on the quarter
The single-month and weekly estimates of the employment rate over the three-month period suggest that the rate was lowest in December 2020 and may have increased slightly in January 2021.
Estimates for November 2020 to January 2021 show 32.37 million people aged 16 years and over in employment, 611,000 fewer than a year earlier and down 147,000 on the quarter.
Estimates of the number of people in employment on the Labour Force Survey (LFS) are consistent with the International Labour Organization (ILO) definition of employment. Under this definition, employment includes both those who are in work during the reference period and those who are temporarily away from a job. The number of people who are estimated to be temporarily away from work includes furloughed workers, those on maternity or paternity leave and annual leave.
The LFS collects information on those temporarily away from paid work that they expect to return to. These experimental weekly Labour Force Survey (LFS) estimates show that before the first lockdown in March 2020 the estimated proportion of people temporarily away from work (that is, the total number of people temporarily away from work divided by the total number of people in employment) was approximately 7.5%. These people could be away for a variety of reasons including sickness, maternity or paternity leave, holidays or economic reasons. There was a large increase in both March and April 2020 in those stating that they were temporarily away from paid work, with nearly 28% away from work in the final week of April 2020. While the proportion of people temporarily away from work has fallen since its peak in April, it has still not dropped below 10%, and increased in November 2020 and again in December and January as a result of further national lockdowns.
Experimental weekly Labour Force Survey (LFS) estimates show approximately half a million employees received no pay while their job was on hold and/or affected by the coronavirus pandemic in April and May 2020. This decreased and had remained largely flat at around 200,000 since July 2020; however, it has increased over the last quarter to an average of just over 300,000 in December 2020 and January 2021.
The Business Insights and Conditions Survey (BICS) shows that for Wave 25 (8 to 21 February 2021), 19.0% of the business workforce were on furlough. Between 30 November 2020 and 14 January 2021, the proportion of the business workforce on furlough rose consistently each fortnight, from 10.8% to 18.3% respectively.
Unemployment
Unemployment measures people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks. The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed.
For people aged 16 years and over, for November 2020 to January 2021:
the estimated UK unemployment rate for all people was 5.0%; this is 1.1 percentage points higher than a year earlier and 0.1 percentage points higher than the previous quarter
the estimated UK unemployment rate for men was 5.2%; this is 1.1 percentage points higher than a year earlier and 0.1 percentage points lower than the previous quarter
the estimated UK unemployment rate for women was 4.7%; this is 1.1 percentage points higher than a year earlier and 0.2 percentage points higher than the previous quarter
The single-month and weekly estimates of the unemployment rate suggest that the rate decreased slightly in January 2021.
For November 2020 to January 2021, an estimated 1.70 million people were unemployed, up 360,000 on the same period the previous year and up 11,000 on the quarter.
Economic inactivity
Economic inactivity measures people without a job but who are not classed as unemployed because they have not been actively seeking work within the last four weeks and/or they are unable to start work within the next two weeks. Our headline measure of economic inactivity is for those aged between 16 and 64 years.
For people aged between 16 and 64 years, for November 2020 to January 2021:
the estimated economic inactivity rate for all people was 21.0% (the highest it has been since June to August 2019); this is up by 0.6 percentage points on the same period the previous year (the largest annual increase since February to April 2010) and up by 0.3 percentage points on the quarter
the estimated economic inactivity rate for men was 17.4% (the highest it has been since August to October 2011); this is up by 1.4 percentage points on the same period the previous year and up by 0.4 percentage points on the quarter
the estimated economic inactivity rate for women was 24.6%; this is down by 0.1 percentage points on the same period the previous year but up by 0.1 percentage points on the quarter
Estimates for November 2020 to January 2021 show 8.71 million people aged between 16 and 64 years not in the labour force (economically inactive). This was 279,000 more than a year earlier and 108,000 more than the previous quarter. The annual increase for people who are economically inactive was largely driven by people who are inactive because they are students or because of “other” reasons.
More about economy, business and jobs
- All ONS analysis, summarised in our economy, business and jobs roundup.
- Explore the latest trends in employment, prices and trade in our economic dashboard.
- View all economic data.
5. Hours worked
Between August to October 2020 and November 2020 to January 2021, total actual weekly hours worked in the UK saw an increase of 8.0 million, or 0.8%, to 968.0 million hours (Figure 3).
Average actual weekly hours worked saw an increase of 0.4 hours on the quarter to 29.9 hours.
Figure 3: The recovery in total actual weekly hours worked has been impacted by increased coronavirus restrictions
UK total actual weekly hours worked (people aged 16 years and over), seasonally adjusted, between November 2005 to January 2006 and November 2020 to January 2021
Source: Office for National Statistics – Labour Force Survey
Download this chart Figure 3: The recovery in total actual weekly hours worked has been impacted by increased coronavirus restrictions
Image .csv .xls6. Redundancies
The redundancy estimates measure the number of people who were made redundant or who took voluntary redundancy in the three months before the Labour Force Survey interviews; it does not take into consideration planned redundancies. So, in this release, the latest estimates may relate to redundancies over the period from the beginning of September 2020 to the end of January 2021.
In November 2020 to January 2021, reports of redundancy in the three months prior to interview increased by 7.2 per thousand on the year, but decreased by 2.3 per thousand on the quarter, to 11.0 per thousand (Figure 4).
Figure 4: The redundancy rate increased by 7.2 per thousand on the year, but decreased by 2.3 per thousand on the quarter, to 11.0 per thousand
UK redundancy rate1, people aged 16 years and over (not seasonally adjusted), between November 2005 to January 2006 and November 2020 to January 2021
Source: Office for National Statistics - Labour Force Survey
Notes:
- The redundancy rate is the ratio of the redundancy level for the given quarter to the number of employees in the previous quarter, multiplied by 1,000.
Download this chart Figure 4: The redundancy rate increased by 7.2 per thousand on the year, but decreased by 2.3 per thousand on the quarter, to 11.0 per thousand
Image .csv .xlsExperimental weekly Labour Force Survey (LFS) estimates show that the number of people reporting redundancy in the three months prior to interview had been increasing since June 2020 and peaked in September. The numbers have gradually decreased since then but in January 2021 are still at a higher level than before the start of the coronavirus (COVID-19) pandemic in March 2020.
Back to table of contents7. Vacancies
In December 2020 to February 2021, there were an estimated 601,000 vacancies. This is 220,000 (26.8%) fewer than the estimated 821,000 vacancies a year earlier (Figure 5), prior to the start of coronavirus (COVID-19) social distancing measures.
Figure 5: The vacancies recovery has stalled in recent months, and the estimated 601,000 vacancies in December 2020 to February 2021 is 26.8% lower than a year ago
Number of vacancies in the UK, seasonally adjusted, between December 2001 to February 2002 and December 2020 to February 2021
Source: Office for National Statistics – Vacancy Survey
Download this chart Figure 5: The vacancies recovery has stalled in recent months, and the estimated 601,000 vacancies in December 2020 to February 2021 is 26.8% lower than a year ago
Image .csv .xlsThe Chartered Institute of Personnel and Development's (CIPD's) winter 2020 to 2021 Labour Market Outlook estimated the net employment balance, the difference between firms' intentions to recruit or lose workers, to be positive (positive 11.0) for the period January to March 2021. This is the first time that the balance was positive since the beginning of the coronavirus pandemic, indicating that business confidence has improved.
The CIPD Labour Market Outlook (PDF, 709KB) found that more than half of employers (56.0%) intended to recruit in the first quarter of 2021. This was up 3 percentage points from the autumn and 7 percentage points from the summer. Recruitment intentions were highest in healthcare (80.0%) and public administration and defence (78.0%). They remained low in hospitality (36.0%) because of lockdown measures that were in place.
Back to table of contents8. Earnings growth
In November 2020 to January 2021, the rate of annual pay growth was positive 4.8% for total pay and positive 4.2% for regular pay (Figure 6). Average pay growth rates have been affected upwards by a fall in the number and proportion of lower-paid jobs compared with before the coronavirus (COVID-19) pandemic. Therefore, it is estimated the net impact of recent job losses is to increase the estimate of average pay by approximately 1.6% – suggesting an underlying wage growth of around 3% for total pay and around 2.5% for regular pay.
Figure 6: Annual growth in total pay was 4.8% and regular pay was 4.2% in November 2020 to January 2021 - however, this growth will be affected by compositional effects
Great Britain average weekly earnings annual growth rates, seasonally adjusted, January to March 2001 to November 2020 to January 2021
Source: Office for National Statistics – Monthly Wages and Salaries Survey
Download this chart Figure 6: Annual growth in total pay was 4.8% and regular pay was 4.2% in November 2020 to January 2021 - however, this growth will be affected by compositional effects
Image .csv .xlsDuring December 2020 to February 2021, most industries saw an increase in vacancies compared with the previous quarter, but each of accommodation and food service activities, arts, entertainment and recreation, real estate activities, and transport and storage experienced a fall. The additional lockdowns and restrictions across the UK at the end of 2020 will have affected these falls.
The rates of total and regular pay growth had stood at 2.8% and 2.9%, respectively in December 2019 to February 2020 immediately prior to any impact from the coronavirus pandemic was seen. They then slowed sharply in April to June 2020 to negative 1.3% for total pay and negative 0.1% for regular pay before increasing. The higher percentage growth figure for total pay reflected an increase in bonus payments, because of bonus payments being postponed from earlier in 2020.
The change in pay growth has been affected by a changing composition of employee jobs, where we have seen a fall in the number and proportion of lower-paid employee jobs. Changes in the profile of employee jobs in the economy will affect average pay growth; a decrease in employee numbers in jobs that have lower pay can have an upward effect on average pay, and the other way around. Further information on the compositional effect can be found in Average Weekly Earnings in Great Britain: March 2021
The Bank of England's Monetary Policy Report (PDF, 4.62MB) for February 2021 noted that average earnings had increased above the pre-pandemic level. However, other indicators of pay pressure show that pay growth was relatively subdued for new recruits and there were pay freezes for some workers.
The Chartered Institute of Personnel and Development's (CIPD's) winter 2020 to 2021 Labour Market Outlook (PDF, 709KB) showed pay expectations improved in the private sector. In contrast, they deteriorated in the public sector. Nearly a third of private sector employers (28.0%) reported that they planned to postpone pay reviews.
Back to table of contents10. Labour market data
Summary of labour market statistics
Dataset A01 | Released 23 March 2021
Estimates of employment, unemployment and other employment-related statistics for the UK.
Real Time Information statistics
Dataset Real Time Information statistics | Released 23 March 2021
Earnings and employment statistics from Pay As You Earn (PAYE) Real Time Information (RTI) (Experimental Statistics) seasonally adjusted.
Labour Force Survey weekly estimates
Dataset X07 | Released 23 March 2021
Labour Force Survey (LFS) experimental weekly estimates of employment, unemployment, economic inactivity and hours in the UK.
Labour Force Survey single month estimates
Dataset X01 | Released 23 March 2021
Labour Force Survey (LFS) experimental single-month estimates of employment, unemployment and economic inactivity.
View all related data on the related data page.
Alternatively, NOMIS provides free access to the most detailed and up-to-date UK labour market statistics from official sources.
11. Glossary
Average weekly earnings
Average weekly earnings measures money paid by employers to employees in Great Britain before tax and other deductions from pay. The estimates are not just a measure of pay rises as they also reflect, for example, changes in the overall structure of the workforce. More high-paid jobs in the economy would have an upward effect on the earnings growth rate.
Economic inactivity
People not in the labour force (also known as economically inactive) are not in employment but do not meet the internationally accepted definition of unemployment because they have not been seeking work within the last four weeks and/or they are unable to start work in the next two weeks. The economic inactivity rate is the proportion of people aged between 16 and 64 years who are not in the labour force.
Employment
Employment measures the number of people in paid work or who had a job that they were temporarily away from (for example, because they were on holiday or off sick). This differs from the number of jobs because some people have more than one job. The employment rate is the proportion of people aged between 16 and 64 years who are in employment. A more detailed explanation is available in A guide to labour market statistics.
Unemployment
Unemployment measures people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks. The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed.
Vacancies
Vacancies are defined as positions for which employers are actively seeking recruits from outside their business or organisation. The estimates are based on the Vacancy Survey; this is a survey of businesses designed to provide estimates of the stock of vacancies across the economy, excluding agriculture, forestry and fishing (a small sector for which the collection of estimates would not be practical).
Pay As You Earn (PAYE) Real Time Information (RTI)
These data come from HM Revenue and Customs' (HMRC's) Pay As You Earn (PAYE) Real Time Information (RTI) system. They cover the whole population rather than a sample of people or companies, and they will allow for more detailed estimates of the population. The release is classed as Experimental Statistics as the methodologies used to produce the statistics are still in their development phase. As a result, the series are subject to revisions.
A more detailed glossary is available.
Back to table of contents12. Measuring the data
The employment, unemployment and economic inactivity estimates rely on data collected from the Labour Force Survey (LFS), a survey run by field interviewers with people across the UK every month.
The LFS performance and quality monitoring reports provide data on response rates and other quality-related issues for the LFS, including breakdowns of response by LFS wave, region and question-specific response issues. The average weekly earnings and vacancies estimates rely on data collected from surveys of employers.
More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the following QMI reports:
Coronavirus
For more information on how labour market data sources are affected by the coronavirus (COVID-19) pandemic, see the article published on 6 May 2020, which details some of the challenges that we have faced in producing estimates at this time.
An article published 11 December 2020 compares our labour market data sources and discusses some of the main differences.
Our latest data and analysis on the impact of the coronavirus on the UK economy and population are available on our dedicated coronavirus web page. This is the hub for all special coronavirus-related publications, drawing on all available data. In response to the developing coronavirus pandemic, we are working to ensure that we continue to publish economic statistics. For more information, please see COVID-19 and the production of statistics.
End of EU exit transition period
As the UK enters into a new Trade and Cooperation Agreement with the EU, the UK statistical system will continue to produce and publish our wide range of economic and social statistics and analysis. We are committed to continued alignment with the highest international statistical standards, enabling comparability both over time and internationally, and ensuring the general public, statistical users and decision makers have the data they need to be informed.
As the shape of the UK's future statistical relationship with the EU becomes clearer over the coming period, the ONS is making preparations to assume responsibilities that as part of our membership of the EU, and during the transition period, were delegated to the statistical office of the EU, Eurostat. This includes responsibilities relating to international comparability of economic statistics, deciding what international statistical guidance to apply in the UK context and to provide further scrutiny of our statistics and sector classification decisions.
In applying international statistical standards and best practice to UK economic statistics, we will draw on the technical advice of experts in the UK and internationally, and our work will be underpinned by the UK's well-established and robust framework for independent official statistics, set out in the Statistics and Registration Service Act 2007. Further information on our proposals will be made available later this year.
We will continue to produce our labour market statistics in line with the UK Statistics Authority's Code of Practice for Statistics and in accordance with International Labour Organization (ILO) definitions and agreed international statistical guidance.
Sampling variability
Level | Sampling variability of level¹ | Change on quarter | Sampling variability of change on quarter¹ | Change on year | Sampling variability of change on year¹ | |
---|---|---|---|---|---|---|
Employment (000s, aged 16+ ) | 32,374 | ± 198 | -147 | ± 172 | -611 | ± 254 |
Employment rate (aged 16 to 64) | 75.0 | ± 0.5 | -0.3 | ± 0.4 | -1.5 | ± 0.6 |
Average weekly hours | 29.9 | ± 0.2 | 0.4 | ± 0.2 | -2 | ± 0.3 |
Unemployment (000s, aged 16+) | 1,703 | ± 92 | 11 | ± 102 | 360 | ± 115 |
Unemployment rate (aged 16+) | 5.0 | ± 0.3 | 0.1 | ± 0.3 | 1.1 | ± 0.3 |
Economically active (000s, aged 16+) | 34,077 | ± 189 | -136 | ± 166 | -251 | ± 243 |
Economic activity rate (aged 16 to 64) | 79.0 | ± 0.4 | -0.3 | ± 0.4 | -0.6 | ± 0.5 |
Economically inactive (000s, aged 16 to 64) | 8,710 | ± 178 | 108 | ± 155 | 279 | ± 225 |
Economic inactivity rate (aged 16 to 64) | 21.0 | ± 0.4 | 0.3 | ± 0.4 | 0.6 | ± 0.5 |
Redundancies (000s, aged 16+) | 308 | ± 37 | -62 | ± 55 | 202 | ± 42 |
Download this table Table 1: Labour Force Survey sampling variability
.xls .csv
Annual growth rate (estimate) | Sampling variability of growth rate¹ | |
---|---|---|
Total pay (nominal) | 4.8 | ± 0.5 |
Total pay (real) | 3.9 | |
Regular pay (nominal) | 4.2 | ± 0.5 |
Regular pay (real) | 3.4 |
Download this table Table 2: Summary of employee earnings, Great Britain, November to January, seasonally adjusted
.xls .csv13. Strengths and limitations
Some of the figures in this bulletin come from surveys, which gather information from a sample rather than from the whole population. The sample is designed to be as accurate as possible given practical limitations such as time and cost constraints. Therefore, the estimates presented in this bulletin contain some uncertainty and are not precise figures. This can have an impact on how changes in the estimates should be interpreted, especially for short-term comparisons.
As the number of people available in the sample gets smaller, the variability of the estimates that we can make from that sample size gets larger. Estimates for small groups (for example, unemployed people aged between 16 and 17 years), which are based on small subsets of the Labour Force Survey (LFS) sample, are less reliable and tend to be more volatile than for larger aggregated groups (for example, the total number of unemployed people).
In general, changes in the numbers (and especially the rates) reported in this bulletin between three-month periods are small and are not usually greater than the level that can be explained by sampling variability. Short term movements in reported rates should be considered alongside longer-term patterns in the series and corresponding movements in other sources to give a fuller picture.
Further information is available in A guide to labour market statistics.
Where to find data about uncertainty and reliability
Dataset A11 shows sampling variabilities for estimates derived from the LFS.
Sampling variability information for average weekly earnings growth rates is available from the "Sampling Variability" worksheets within Datasets EARN01 and EARN03. The sampling variability of the three-month average vacancies level is around plus or minus 1.5% of that level. Information on revisions is available in the Labour market statistics revisions policy.
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