According to research , the median pay award in the first quarter 2025 has remained the same as the three previous rolling quarters. Pay settlements are still at 3 percent in the UK.
Brightmine, a provider of HR insights, has revealed that despite recent increases in National Insurance contributions there is no immediate change to pay strategies. Employers are adopting a cautious attitude as economic signals are still mixed.
Sheila Attwood is the HR Insights and Data Lead for Brightmine. She said that there are no signs of a reactionary response to recent changes in fiscal policy. She said that employers will likely monitor developments carefully before making any major 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. The outlook is clouded by global uncertainty, particularly in relation to the US government’s actions. These two factors confirm that we believe the pay award levels in the near term will remain stable.
April’s reviews continue the trend of 3 percent
Nearly half of the annual pay settlements are implemented in April. The pattern is confirmed by the early April 2025 figures. The median pay award in April is 3 percent. The central half of the outcomes ranges between 2 percent to 3.5 percent.
Brightmine’s analysis shows 75.5 percent (of the April settlements) are lower than what was awarded the previous year for the same employee group.
Attwood stated, “This early glimpse confirms what we have been seeing in recent months. Most organisations are keeping the line at 3 %. We are seeing more lower-level pay awards, but the overall picture is one of stability. This is especially true as inflation decreases and NIC changes take effect.
The award range has been narrowed by analysis
Brightmine collected data from 125 pay awards that were implemented between 1 January and 31 March 2025. This information covered over 192,000 employees. The results show that the pay range has narrowed, with the middle 50% of awards falling between 2.5 and 3.5 percent. A third (31%) of all awards were at exactly 3 percent while 58.4% were between 2 and 3 percent.
Only four of the organisations in our sample implemented a pay freeze during the first quarter. Most companies continue to offer increases, but the amount of these increases has decreased.
According to a matched sample analysis of pay awards for the current quarter, 72.7 percent are lower than last year’s award amounts for the same employee groups. Only 15.5 percent of pay awards are higher, and 11.8 remain the same.
