Pay awards remained “steady” at 3 percent in the first three months of this year in spite of the rise in employer national insurance (NI) in April.
The findings, from HR data provider Brightmine, showed that the median pay award has stayed at 3 percent for four months in a row and suggests that a sharp drop in pay deals is “unlikely in the near term”.
“Currently the data isn’t showing any signs of a knee-jerk reaction to recent national insurance changes,” said Sheila Attwood, HR insights and data lead at the provider. “However, we do know that employers are taking a watch and wait approach, so we expect to see that reflected in the second half of this year.”
Attwood said stronger than expected GDP figures, of 0.5 percent in February, are good news and offer some reassurance for businesses.
However, she said that 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.”
Of the 125 pay awards made in the three months to 31 March 2025, just four organisations implemented pay freezes. Brightmine said that while the value of deals has fallen, most employers are still offering pay rises.
The provider emphasised that April is the most significant month in the pay review calendar, with almost half of all annual pay settlements taking effect. Data collected from the early April 2025 pay deals suggest that the trend of steady pay rises is “holding firm”.
Initial data shows the median basic pay award in April is 3 percent, with the middle half of deals ranging between 2 percent and 3.5 percent. The provider said it was notable that 75.5 percent of these settlements are lower than the award given at the previous review for the same group of employees.
“This early snapshot confirms what we’ve been seeing over recent months – most organisations are holding the line at 3 percent,” said Attwood. “While we are seeing more pay awards at the lower end, the overall picture remains one of stability, particularly as inflation eases and NI changes bed in.”
