Buying Power of UK Salaries Remains Competitive in Europe Despite Brexit Uncertainty

NEW YORK, Feb. 14 -- Willis Towers Watson, a risk management, insurance brokerage and advisory company, issued the following news release:

Entry-level professionals in the UK earn a gross base salary of pound sterling22,242, which ranks only as the 13th highest among the top 21 European economies, according to Willis Towers Watson's latest Global 50 Remuneration Planning Report.

The report also examines the tax burden in each country, as well as the cost of living, to establish how much buying power employees get from their pay. This measure gives a 'purchasing power' comparison between different countries and an indication of what an employee's net income will provide within their country of residence.

When this is taken into account, salaries for UK employees look more competitive as lower taxes and cheaper living costs make the country more affordable than many of its European neighbours. Once adjusted for purchasing power parity (PPP) to account for taxes and living costs, the wage of a typical entry level professional in the UK becomes pound sterling22,165, which sees the country climb five places to 8th highest in Europe, surpassing Norway, Denmark, Sweden and France.

Middle managers enjoy similar relative strength in their pay levels. The typical middle manager in the UK earns pound sterling58,833 gross a year, putting them in 10th spot in Europe, and that ranking lifts to sixth place and pound sterling42,690 on a PPP-adjusted basis. Only middle management staff in Luxembourg, Switzerland, Germany, Belgium and Ireland enjoy greater buying power than their counterparts in the UK.

Hazel Rees, GB Leader for Willis Towers Watson's Rewards Line of Business, said: "The UK's improved performance in the rankings, when purchasing power is taken into account, demonstrates the positive impact of a lower tax and cost-of-living burden on cash compensation in the UK compared to much of Continental Europe. This approach is also a driver behind some common differences in reward design practised in the UK versus the rest of Europe, such as the use of car allowances instead of grants and the comparatively lighter use of voluntary fringe benefits.

"If UK companies are to stay competitive, however, available resources need to be better allocated in order to attract, motivate and retain their best employees as market conditions create increased competition for talent. While salary remains the main consideration for UK workers when deciding to join or stay with a company, our own research shows that employers continue to fall short in how they deliver pay programmes, including base pay and bonuses."

Switzerland was the country with the highest salaries across all levels, with base salaries of pound sterling53,024 for entry level professionals and pound sterling97,929 for middle management roles. Despite wages being substantially adjusted downward when taxes and the cost-of-living are factored in, Swiss workers still have higher buying power than nearly all other Europeans, at pound sterling35,069 for entry level staff and pound sterling57,522 for middle managers.

See table here (https://www.willistowerswatson.com/en/press/2019/02/buying-power-of-uk-salaries-remains-competitive-in-europe-despite-brexit-uncertainty)

The Global 50 Remuneration Planning Report

The Willis Towers Watson Global 50 Remuneration Planning Report is designed for multinationals that need reliable and consistent compensation, benefit and economic information. It contains the latest data on remuneration practices in 60 major economies worldwide. The 2018-2019 report is available to purchase in full.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees serving in more than 140 countries. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas -- the dynamic formula that drives business performance. Together, we unlock potential.