It's early January and FTSE 100 CEOs have already earned more than an average worker's yearly pay

By this point in the year, the average FTSE 100 CEO and Magic Circle law firm partner has already earned more than the average UK worker’s annual salary. But inequality can’t be fixed with higher wages alone, warn those in the know.

According to the High Pay Centre, midnight on Tuesday (6 January) marked the point where the average CEO would have made as much money as an average full-time worker earns in a year. 

It only takes until today (8 January) for Magic Circle law partners to reach that date, 20 January for Big Four accountancy partners, and 19 March for those in the top 1% of earners.

“Closing this gap requires more than better wages, though their importance cannot be overstated. It also depends on progression opportunities, predictable hours, access to training, and addressing the cost of essentials like housing and childcare,” said Jake Shepherd, a senior researcher at the Social Market Foundation think tank.

“These figures illustrate just how detached pay at the very top has become from the reality facing working households. The problem is not high earners, but persistently low and insecure pay across much of the labour market, including for those in full-time work who still struggle to cover basic living costs.”

Increases to the national minimum wage mean that the lowest earners in the UK have gained ground on average earners. In 2015, those on minimum wage earned £4 for every £10 made by average earners – by 2024 that figure had increased to £5 for every £10.

That contrasts to the United States, where the lowest incomes have slipped away from average earnings, going from £2.52 for every £10 to £1.76.

But overall, wages in the UK have stagnated in real terms since 2008, leaving workers barely any better off.

Read more:

• The real Living Wage is a win-win for workers and businesses – here’s why
• Single people must earn at least £30,500 per year to live well in the UK
• Wages outside of London and South East are worse now than in 2008 – can Labour turn things around?

Chris Hayes, chief economist at the Common Wealth think tank, said income inequality has been largely flat since early 2000s, but unequal living standards have been driven by rising prices for essentials, which hit poorer households harder.

“Structural changes to the cost of living are therefore the most urgent remedy, alongside a rebalancing of tax away from labour towards capital,” said Hayes.

Those in low paid jobs are most likely to be 16-21 years old, based in the North East, female and working in accommodation and food

The “Fat Cat Day” milestone was calculated using average FTSE 100 CEO earnings of £4.4 million, compared to a median full-time worker earning £39,039. That’s 113 times larger, a ratio unchanged since 2025.

“Years of workers’ wages being held down, coupled with rising bills, have left most people worse off and many struggling to afford the essentials,” said Sampson Low, head of policy at the Unison trade union.

“CEOs who’ve been shielded from these concerns, and seen their wealth continue to rise, are among the biggest critics of the new Employment Rights Bill.”

In December, the Employment Rights Act became law and strengthened the hand of unions. From February 2026, unions will only need a simple majority to take strike action and will need to give less notice of action. 

From April, they can ballot members electronically, and from October employers must inform workers of their right to join a union and give union representatives time off for their duties.

Increasing the power of unions could close pay gaps, experts said.

“The widening gap between the UK’s lowest and highest paid workers is partly due to the decline of trade unions. Pay inequality is lower in countries where union members account for a greater share of the population,” said Joseph Evans, a research fellow at the IPPR think tank.

But there are calls for the government to go further. The High Pay Centre has called for a tax on executive earnings if they exceed a certain multiple of their workers’ salaries.

Paul Nowak, general secretary of the TUC, said corporate excess should be tackled with “a dose of common sense”.

Nowak said: “The government must act to rein in boardroom greed – including by guaranteeing workers a seat on executive pay committees.”

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