Recent reports reveal a stable pattern in UK pay awards despite inflation shifts.
- The median pay award for April to June 2024 remains at 4.9%, mirroring the previous quarter.
- Employees on the national living wage experienced a significant 9.8% pay increase this April.
- Upcoming changes in minimum wage policies could impact employer payroll strategies.
- Employers now face a predictable pay settlement landscape with fewer deviations.
The latest data provided by Brightmine, a key player in HR analytics, indicates that median basic pay awards in the UK have held steady at 4.9% for the three months ending June 2024. This stability comes against the backdrop of the Bank of England achieving its 2% inflation target in May, a notable decrease from the peak of 11.1% in October 2022.
This consistency in pay awards is expected to continue, although Brightmine foresees a potential decline in settlement levels for 2025. After experiencing two years of substantial national minimum wage increases, the company had projected a more restrained rise in April 2025.
In light of the new Labour government’s proposal to revise the Low Pay Commission’s remit, employers may soon need to consider the cost of living and median wages alongside economic conditions. Additionally, the potential removal of age-based minimum wage rates for adults could introduce significant payroll adjustments for some employers.
Sheila Attwood from Brightmine comments on the situation, stating, ‘Our headline measures indicate broad stability of pay awards, and we expect this pattern to persist throughout the year. Settlements are more tightly bunched compared to this time last year, with fewer exceptionally high pay awards being observed. As we continue to see inflation levels stabilise, we foresee a more consistent and predictable approach to employee compensation moving forward.’
This analysis is underscored by data from 145 pay settlements between April and June 2024, affecting 370,339 employees. Though the median basic award remains under 5%, a small fraction—16.3%—of employees received increases exceeding 7%, particularly those on the national living wage, who benefited from a 9.8% increase in April.
Excluding the national living wage adjustments, the median settlement stands at 4.3%. The most common pay award during this period was 4%, with approximately 47.3% of all settlements falling between 4% and 5%, making 4% slightly more prevalent.
Interestingly, a majority of employees—around 61%—received pay awards that were less generous than those offered in 2023. This shift highlights a broader trend towards more constrained pay settlements compared to previous years.
These findings suggest a stabilising trend in pay awards amidst evolving wage policies and economic conditions.
