Chapter 2 - Personnel
 
Chart to Table 2.24 UK Regular Forces salaries: illustrative rates and indices
 

Real Growth1 of UK Regular Forces salaries and average earnings2,3
 
Graph to show Military salaries: illustrative rates and indices
Source: DASA(Quad-Service)

1.    Real growth in salaries is growth over and above inflation. It represents the increase in purchasing power between one year and the next. For example, if salaries grew by 2%, but prices rose by 1%, real salary growth would be about 1%, because someone earning that salary could purchase around 1% more goods and services. Real pay growth can be negative if inflation is outstripping salary growth, values at 0% indicate an increase in line with inflation. The measure of inflation used here is growth in Retail Price Index (RPI).
2.    When calculating the real growth of average earnings the Office for National Statistics (ONS) Average Earnings Index (LNMM: whole economy, not        seasonally adjusted, including bonuses) has been employed.

3.    Overall, real growth in military salaries follows a similar path to that of average earnings. However, there is a noticeable peak in 1991/92. This increase is partly a consequence of the previous year's pay award being staged but also includes increases to X Factor and a change in the pension abatement. Due to the discontinuity in the military salaries index between 2000/01 and 2001/02 it is not possible to calculate a pay increase over this period. Any increase over this period would include the effects of the introduction of Pay 2000.