Pay awards flatline second half of 2024

Published: 18 December 2024 | by Brightmine

New data from Brightmine, the HR data and insights provider, reveals that pay rises have remained flat at 4% for the last five consecutive months. This follows pay rises sitting closer to 5% in the middle of the year and is the start of the downward trend that the Brightmine 2025 Pay Forecast report predicts will continue into next year.

The data over the full 2024 calendar year, representing around 5.9 million employees in the UK, shows the median basic pay award stands at 4.5%, 1.5 percentage points lower than the median basic settlement in 2023 which stood at 6%.

Across all deals, pay freezes accounted for 2.6% of awards, remaining largely in line with previous years. Despite more challenging conditions this year, organisations have still opted for pay increases rather than freezing pay, and they expect to continue doing so in 2025 despite a more complex landscape.

Economic pressure and declining business confidence

National Insurance Contributions (NICs) increase would affect their pay award budgets. While many were still uncertain, nearly four in 10 confirmed they plan to reduce the budget for salary reviews in response.

“On top of NICs contributions, businesses are also facing rises in the national minimum wage, both contributing to a squeezed budget which could significantly affect the pay awards that employees are given next year.”

2024 pay awards highlights

Based on 749 basic and 95 merit awards for 2024, the following are key findings based on analysing all 2024 deals, which represent around 5.9 million UK employees:

• 2024 has seen less variability in basic pay deals. When assessing the upper and lower quartiles, awards in 2024 are closely grouped, with the middle 50% sitting between 4% and 5.3%. By contrast, 2023 deals were more widely spread, with the lower quartile standing at 5% and upper quartile at 8%. This demonstrates that 2024 deals are typically more consistent, while 2023 awards were more varied.
• The most common basic pay awards given are 4% and 5%. Around one in five (19.4%) of all basic deals in 2024 were worth exactly 4% and 19.2% were worth 5%. Close to half of all basic awards (49.7%) were worth between 4% and 5% (inclusive).
• Basic deals have been more generous. With the median pay budget increase for merit or performance-related awards standing at 4%, basic deals have been higher compared to the median merit budget.
• Awards have been worth less than what was given in 2023. Around three-fifths (57.3%) of pay awards are lower than the deal given to the same group of employees in 2023.

Sector-specific data highlights varying trends across industries

• Public Sector: In the public sector, the lower quartile stood at 4.5% and the upper quartile at 6% and median at 5% – 1 percentage point higher than the national average.
• Retail & Wholesale: This sector showed the widest interquartile range in pay awards, with the lower quartile at 4% and the upper quartile at 8.2%, and median at 5%. This likely reflects the increases to the national living wage, which saw a 9.8% rise from 1 April 2024.
• Transport & Storage: Pay awards ranged from 3.5% at the lower quartile to 6.7% at the upper quartile with a median of 5%. This is likely reflected by the pay reward increases from unions worth between 5% and 6.6%, with an average rise of 4.6%, according to union reports.
• Construction: Pay awards in construction ranged between 4% in the lower quartile and 7% at the upper quartile with a median of 5%. This is likely reflected by some workers achieving increases as high as 17.4%, according to Unite the Union.

December pay awards

Of the data of 22 deals between September 1 and 30 November 2024, representing approximately 227,000 employees across UK organisations, the median basic pay award has remained consistent at 4%.

This indicates a sustained trend of stability in pay settlements over the past several months, despite fluctuating economic conditions.

Chart 1: Pay review pattern – whole economy, November 2023 to November 2024

About the data: 2024 pay awards

The Brightmine analysis 2024 pay deals, based on the details of 749 basic and 95 merit pay awards that came into effect between 1 January and 30 November 2024. Collectively they cover the outcomes for 5.9 million employees.

The Brightmine analysis for November is based on the details of 22 pay awards that came into effect between 1 September and 30 November 2024. Collectively they cover the outcomes for just over 227,000 employees.

The next press release on pay settlement trends will be released on January 22.