Record low pay rises ‘sign of pressure on firms’

The median rise in pay for UK workers stands at only one per cent, new research has found, which could lead to a fall in motivation among employees.

According to the Incomes Data Services, this is the lowest median pay settlement since the survey’s electronic records began and is believed to have been caused by a combination of a large proportion of pay freezes and the fact that April, a key month for pay reviews, had fallen out of the scope of the figures.

Commenting on the findings, Tony Dolphin, senior economist at the Institute for Public Policy Research, said it also demonstrated the increasing pressure companies were feeling under amid the recession.

“Pay deals and pay settlements have always dropped below the sort of average on a five-year or ten-year trend […] in recessions and that’s what’s happening now,” he noted.

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However, Mr Dolphin added that the findings may also reflect an increasing number of Britons choosing to sacrifice a pay rise in favour of keeping their jobs.