Data from HR insights provider Brightmine indicates that a drop in pay awards is unlikely in the near term despite the recent increase in National Insurance contributions. The company are indicating a consistent picture for pay awards in the first quarter of 2025, with the median pay award remaining at 3 per cent for the fourth consecutive rolling quarter.
“Currently the data isn’t showing any signs of a knee-jerk reaction to recent national insurance changes,” says Sheila Attwood, HR Insights and Data Lead. “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.
“The good news is that the latest GDP figures show stronger-than-expected growth of 0.5 per cent in February, offering some reassurance for businesses,” she added. “However, global uncertainty – particularly around the actions of the US government – continues to cloud the outlook. These two factors confirm our view that pay awards levels will remain steady in the near future.”
April tends to be a significant month in the pay review calendar, with almost half of all annual pay settlements taking effect during this period. Early indications from the first April 2025 pay deals suggest that the overall pattern is holding firm. The median basic pay award in April stands at 3 per cent, with the middle half of deals ranging between 2 per cent and 3.5 per cent. Notably, 75.5 per cent 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 per cent,” adds Attwood. “While we are seeing more pay awards at the lower end, the overall picture remains one of stability, particularly as inflation eases and NIC changes bed in.”
