[UK] Median pay awards at lowest since 2021

In the UK, pay settlement growth fell sharply late last year and is expected to cool further in 2025, according to new research, Reuters reports.

A survey from HR data firm Brightmine showed firms under pressure as a result of the government's increase in payroll taxes. It revealed that the median pay award fell to 3.3 per cent in the three months to December, the lowest since December 2021, and a steep decline from 4 per cent in the three months to November.

Brightmine reportedly said the median forecast for pay settlements in 2025 was 3 per cent - down from 4.5 per cent in 2024 - reflecting concerns about the economy and a more cautious approach to pay awards.

Preliminary data for January suggested a median basic pay award of 3.5 per cent.

Finance minister Rachel Reeves' social security contributions increase - paid by employers - and the April minimum wage hike were expected to increase the pressure on firms' pay budgets, the data firm said.

Speaking to Reuters, Sheila Attwood - Brightmine's senior content manager - said, "Businesses are feeling financial pressure as we kick off the beginning of the year and are looking for creative ways to minimise the impact on employee pay packets – whether that’s passing costs onto consumers or reducing the number of employee hours worked especially for entry-level, National Living Wage jobs."

Data published on January 21 showed that private sector pay excluding bonuses - closely monitored by the Bank of England as a gauge of domestic inflation pressure - rose to 6.0 per cent in the three months to November, the highest since February 2024.

Source: Reuters

(Quote via original reporting)

In the UK, pay settlement growth fell sharply late last year and is expected to cool further in 2025, according to new research, Reuters reports.

A survey from HR data firm Brightmine showed firms under pressure as a result of the government's increase in payroll taxes. It revealed that the median pay award fell to 3.3 per cent in the three months to December, the lowest since December 2021, and a steep decline from 4 per cent in the three months to November.

Brightmine reportedly said the median forecast for pay settlements in 2025 was 3 per cent - down from 4.5 per cent in 2024 - reflecting concerns about the economy and a more cautious approach to pay awards.

Preliminary data for January suggested a median basic pay award of 3.5 per cent.

Finance minister Rachel Reeves' social security contributions increase - paid by employers - and the April minimum wage hike were expected to increase the pressure on firms' pay budgets, the data firm said.

Speaking to Reuters, Sheila Attwood - Brightmine's senior content manager - said, "Businesses are feeling financial pressure as we kick off the beginning of the year and are looking for creative ways to minimise the impact on employee pay packets – whether that’s passing costs onto consumers or reducing the number of employee hours worked especially for entry-level, National Living Wage jobs."

Data published on January 21 showed that private sector pay excluding bonuses - closely monitored by the Bank of England as a gauge of domestic inflation pressure - rose to 6.0 per cent in the three months to November, the highest since February 2024.

Source: Reuters

(Quote via original reporting)