A quarter of pay increases are worth 6% or more
Press release March 2024
The median pay increase across the economy has held steady at 5.0% in the three months to January 2024. However, analysis of 63 new deals implemented across the economy between 1 November 2023 and 31 January 2024 revealed that nearly a quarter of all increases were worth 6% or more and some of the highest increases are in excess of 9%. These most commonly occurred in general manufacturing where the upper quartile of awards is 5.8%. Pay awards clustered around the 5% mark are common across industries such as engineering, energy and water, food and drink manufacturers as well as retail.
Pay awards in the three months to January 2024 are generally higher than the current rate of CPI inflation (4% in the year to January 2024). Inflation has been falling and wage rises tend to lag behind inflation, chronologically, so the former are likely to follow the downward trend in the latter. However, April is a key month for pay reviews and it coincides with the forthcoming percentage increase in the National Living Wage (NLW) of 9.8%. This uplift will bring the statutory minimum rate for adult workers aged 21 and over to £11.44 per hour and will also impact on pay awards at those firms where most employees are either on the statutory floor or are paid just above it.
“IDR’s regular monitoring of pay rises shows that pay tends to lag behind inflation. Just as pay rises rose on average in the wake of the recent spike in inflation, if inflation continues to fall then pay awards will follow, though other factors, such as the forthcoming rise in the statutory rate as well as continued tight labour markets will also pay a role,” commented Zoe Woolacott from IDR.
The latest pay settlement figures are based on a sample of 63 awards effective between 1 November 2023 and 31 January 2024, mostly at large organisations and together covering over 240,000 employees. Very few awards in the sample are from the public sector and therefore the results predominantly reflect the picture in the private sector.
Note for Editors
Incomes Data Research monitors pay reviews across the economy throughout the year and publishes findings in ‘Pay Climate’, our quarterly e-bulletin, with additional monthly updates on our website: https://www.incomesdataresearch.co.uk/.
Our data is used by all those concerned with decisions on pay, including employers in the private and public sectors, government bodies, trade unions and economists. We have conducted research for a wide range of clients including the Low Pay Commission and the Office of Manpower Economics, as well as for a range of employers and employee representative organisations.
For any queries relating to this research please contact Zoe Woolacott on 01702 669549 or zoewoolacott@incomesdataresearch.com.