National Living Wage changes keep pay awards at 4.9%, Brightmine finds
The latest data from Brightmine (formerly XpertHR), HR data and insights provider, shows the median basic pay award in the three months to the end of June 2024 was 4.9%, unchanged from the previous rolling quarter’s revised figure.
With the Bank of England reaching their 2% inflation target in May – a significant drop from the 11.1% peak in October 2022 – pay awards are expected to continue to adjust accordingly, with Brightmine predicting a decrease in pay settlement levels in 2025.
After two years of relatively high national minimum wage increases, Brightmine previously anticipated more modest rises in April 2025. However, with the new Labour government proposing changing the Low Pay Commission’s remit to consider the cost of living alongside median wages and economic conditions, plus the removal of age-based minimum wage rates for adults, employers could face higher costs and may have to make significant changes to pay rates for some employees.
Sheila Attwood, Brightmine senior content manager, data and HR insights, comments: “Our headline measures indicate broad stability of pay awards and we can expect this pattern to persist throughout the year. Settlements are more tightly bunched compared to this time last year, with fewer exceptionally high pay awards being observed. As we continue to see inflation levels stabilise, we foresee a more consistent and predictable approach to employee compensation moving forward.
“The Government typically announces uplifts to the national minimum wage rates in November each year. Organisations with employees paid these rates can start to model what the proposed changes would mean in terms of their pay budgets, particularly if the removal of the age-based adult rates is confirmed.”
Latest rolling quarter findings
Based on 145 pay settlements that came into effect in the three months between 1 April and 30 June 2024, covering 370,339 employees, Brightmine found:
- Median basic award remains below 5%.For the three months to the end of June, the median basic settlement stands at 4.9%, unchanged from the previous quarter. About 16.3% of basic deals exceed 7%, mainly for employees on the national living wage, who saw a 9.8% pay rise in April 2024. Excluding these, the median settlement is 4.3%.
- Most common basic award is worth 4%. Around half (47.3%) of all settlements that came into effect in the latest rolling quarter are worth between 4% and 5%, with 4% being slightly more common.
- Many employees see pay awards worth less than 2023 settlement.Around three-fifths (61%) of pay deals in a matched sample analysis are worth less than the award provided to the same employees in 2023.
Pay review pattern – whole economy, June 2023 to June 2024
For more pay trends information for the rolling three months to the end of June, including sector insights, please click here.
