Median pay awards in the first quarter of 2025 have remained unchanged from the previous three rolling quarters as pay settlements in the UK continue to hold firm at 3 percent, according to research.
Despite recent increases to National Insurance contributions, the latest data from HR insights provider Brightmine indicates no immediate shift in pay strategies. Most employers appear to be adopting a cautious approach as economic signals remain mixed.
Sheila Attwood, HR Insights and Data Lead at Brightmine, said there is currently no evidence of a knee-jerk reaction to recent fiscal policy changes. She added that employers are likely to monitor developments closely before making any significant pay adjustments.
“The good news is that the latest GDP figures show stronger-than-expected growth of 0.5 percent in February, offering some reassurance for businesses,” Attwood said. “However, global uncertainty – particularly around the actions of the US government – continues to cloud the outlook. These two factors confirm our view that pay award levels will remain steady in the near future.”
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April reviews show continuation of 3 percent trend
April remains the most important month in the pay review calendar, with nearly half of all annual settlements taking effect during this period. Early figures for April 2025 reinforce the prevailing pattern. The median basic pay award for April stands at 3 percent, with the central half of outcomes ranging between 2 percent and 3.5 percent.
Brightmine’s analysis shows that 75.5 percent of April settlements are lower than the previous year’s award for the same employee groups.
Attwood noted, “This early snapshot confirms what we’ve been seeing over recent months – most organisations are holding the line at 3 percent. While we are seeing more pay awards at the lower end, the overall picture remains one of stability, particularly as inflation eases and NIC changes bed in.”
Analysis shows narrowing of award range
Brightmine collected information from 125 pay awards implemented between 1 January and 31 March 2025, covering over 192,000 employees. The findings show that the range of pay awards has tightened, with the middle 50 percent falling between 2.5 percent and 3.5 percent. A third of all awards (31%) were exactly 3 percent, while 58.4 percent were between 2 percent and 3 percent.
Pay freezes remain rare, with only four organisations in the sample implementing a freeze in the first quarter. The majority of companies are still offering increases, although the level of those increases has shifted downwards.
Based on matched sample analysis, 72.7 percent of current quarter pay awards are lower than the previous year for the same employee group. Only 15.5 percent are higher and 11.8 percent remain unchanged.
