According to Incomes Data Research, the median pay award in the private sector was 3.5% for the three-month period ending March 2025. It had fallen to 3.5%, from 4%, in the previous three-month period ending February.
The latest figures for pay settlements are based on an analysis of 93 awards made between 1 January to 30 March. These were mostly at large organizations and covered more than 720,000 workers.
The median for the entire economy remained at 3.2% in march. In the most recent analysis period, the proportion of private sector salary increases between 3% to 3.99% increased from 39% in Feburary to 45%. This maintained the median. This category included awards in a variety of industries, such as financial services and retail.
A smaller percentage of awards worth 4% or higher caused the upper quartile to fall from 4.3% to just 4%. In February, only 45% of pay awards fell into the top quartile. Just over a quarter (36%) were in this quartile. The median fell from 3.5% down to 3.2%, largely due to the results of private services.
The median increase in pay in manufacturing remains at 3.5%. Manufacturing and production outcomes have remained unchanged since February. The upper quartile dropped from 4.3% down to 4% as a result of fewer awards with a value greater than 4%, which is now 38%. This was down from 45%.
Construction and engineering continued to award at least 4%. The median award for non-profits was 3%. Although this was only a small percentage of the sample results, it helped to keep the median of 3.2% in the larger economy.
Zoe Woolacott is a senior researcher with IDR. She said that higher-end awards of 6% or greater will be more common from April onwards due to the impact of the 6.7% increase in the National Living Wage, which increased the minimum rate of pay of workers aged over 21 to PS12.21. This affects workers in low-paying industries such as hospitality, retail and care.
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