The median basic pay rise for the three months to the end of January 2025 stays at 3 percent – the second consecutive rolling quarter at this level.
The new data from HR data and insights provider Brightmine shows a continued slowdown in pay growth, with 3 percent being the lowest median pay award recorded since December 2021. January is one of the key months for pay decisions, and these figures provide an early indication of where settlements may trend throughout the year.
Sheila Attwood, senior content manager for data and HR insights at Brightmine, said, “January’s pay trends data confirms a clear shift toward more restrained pay awards as businesses respond to ongoing economic pressures. As we move further into 2025, the impact of rising National Insurance contributions could add further complexity to pay decisions and workforce planning.”
Brightmine’s analysis is based on 69 pay settlements covering more than 95,000 UK employees between November 2024 and January 2025. The most common basic pay award remains at 3 percent, with 55.4 percent of settlements falling between 2 percent and 3 percent. The upper quartile of pay settlements has dropped to 4 percent, while the lower quartile remains at 2.5 percent for the third consecutive rolling quarter.
Only 20 percent of pay settlements exceeded 4 percent, and just 10.8 percent of deals were worth more than 5 percent. Nearly three-quarters (72.3%) of pay awards were lower than those given to the same employees a year ago, while only 16.9 percent were higher.
Businesses are facing economic pressures, and the planned increase in National Insurance contributions could further influence pay decisions in the coming months.
Labour Turnover Remains Steady, but Concerns Persist
Brightmine’s latest labour turnover data shows that rates in 2024 have remained largely unchanged from 2023. The median voluntary turnover rate for 2024 stood at 10.3 percent, while total turnover reached 14 percent. This follows a peak in 2022, when total turnover hit 22.5 percent, reflecting the significant workforce shifts that have since stabilised.
Despite this stability, more than one-third of organisations (36.1%) report concerns that turnover remains too high. The most cited reasons for employee turnover are limited opportunities for promotion or professional development, mentioned by 58.3 percent of respondents. Uncompetitive pay and benefits were the second most common factor, affecting 49.6 percent, followed by excessive workload at 28.3 percent.
“While labour turnover rates have stabilised, the combination of pay awards stalling and ongoing concerns about workload and career progression could increase resignations later in 2025 – especially if inflation remains a pressure on real wages,” said Attwood.
“Employers may need to balance cost control with competitive pay and other retention measures to avoid unwanted staff losses.”
