UK hospitality pay falls for the first time in two years

Average weekly pay across Britain's accommodation and food service businesses fell 1.4% in the year to August, the first annual decline in nearly three years, according to the Office for National Statistics. Earnings dropped from £354 to £349, based on payroll data drawn from more than 8,800 employers covering 12.8 million workers.

Vacancies in the sector fell too, down 7% year-on-year to 70,000 in the three months to September, from 75,000 a year earlier. The ONS figures are pre-tax and reflect changes in workforce mix as well as pay rates, so they do not show whether individual workers earned less.

Minimum wage and NI costs cited as drivers

A falling wage bill reads as relief until you count how many fewer people are on the payroll.

Industry analysts point to two policies pushing in the same direction: successive increases to the National Minimum Wage and higher employer National Insurance contributions, both of which raise the cost of hiring younger staff. Saxon Moseley, head of leisure and hospitality at RSM UK, said the wage decline “suggests we may have reached an equilibrium,” reading the fall as a sign of stabilising costs rather than straightforward hardship. He called the drop in vacancies the more worrying number, arguing it shows businesses being priced out of hiring altogether rather than simply paying less.

RSM UK also flagged leaner staffing and AI-assisted operations as a possible factor behind fewer open roles, though it stopped short of quantifying the effect.

A Budget decision still to come

Moseley said operators want lower taxes on younger workers and a freeze on minimum wage increases, with the industry watching for April 2027's rate ahead of the Budget. Almost one million 16-to-24-year-olds are not in education, employment or training, a pool the government, UKHospitality, McDonald's, Nando's and Wagamama are targeting through a three-year scheme offering paid work, experience and training to 100,000 people aged 18 to 24.

The scheme and the wage data point in different directions: one aims to pull more young people into hospitality jobs, the other suggests the sector is already struggling to keep the roles it has. The wage figures sit awkwardly next to September's record sales growth and UKHospitality's push for a VAT cut ahead of the Budget. Whether April settles that tension, or adds another cost line, will shape hiring into 2027.