The median pay increase across the UK economy has remained at 5% in the three months to April 2024, according to the latest analysis by Incomes Data Research (IDR).
The research organisation analysed a sample of 159 pay awards effective between 1 February and 30 April 2024, covering more than 1.3 million employees in total.
It found that more than a quarter (28%) of pay awards were worth 6% or more, with some of the highest increases in excess of 9%. These most commonly occurred in hospitality and retail. A total of 23% of pay awards were between five and 5.99%, 28% were between four and 4.99%, and 20% were between three and 3.99%. Just 1% of awards were between 0.01 and 2.99%.
Pay awards in the three months to April 2024 were found to be higher than the current rates of RPI and CPI inflation, at 3% and 2% respectively in the year to May 2024.
In the private sector, the median pay award was lower than for the economy as a whole at 4.5%, due to the number in the 4% to 4.99% bracket. Meanwhile, the median pay award in both the public and not-for-profit sectors was 5%.
Around half of annual increases took effect in April. The latest 9.8% rise brought the minimum rate for workers aged 21 and over to £11.44 per hour and impacted awards at firms where most employees are paid the minimum or just above it.
Zoe Woolacott, senior pay researcher at IDR, said: “While the latest rise in the statutory minimum rate has influenced pay outcomes, it is likely that the level of increase awarded by employers will follow the downward trend in inflation. At the same time, pay awards remain generally higher than at any point over the past two decades or more.”
Ken Mulkearn, director of research at IDR, added: “Even though inflation has come down, the cost of living remains an issue, and labour markets are still tight in many areas, in part due to a rise in economic inactivity post-pandemic. These factors are helping to buoy up the level of pay awards.”
