UK pay reviews improve in 2016, but average wage rise of only 1.3% signalled
Survey data collected in March and April point to disappointingly weak UK pay reviews in 2016, though wage pressures have picked up slightly compared to 2015.
The survey, compiled by Markit using data collected by Ipsos MORI, found that around one-third (34%) of all employees that have received a pay review so far this year report their pay to have been frozen, while 3% are suffering a pay cut. Although 64% are reporting their pay to have been revised higher, only 23% are reporting an increase of more than 2%.
The survey responses collectively point to employee pay reviews leading to an average pre-tax salary increase of just 1.3% this year, higher than the 1.0% increase signalled for 2015 but below the 1.5% rate recorded in 2014.
Pay reviews in the public sector continue to lag behind the private sector, with salary growth rates of 1.6% and 0.9% signalled respectively, although both are up on 2015.
In the public sector, the proportion of employees reporting a pay cut or freeze rises to 51% compared to 28% in the private sector. Only 13% of public employees indicated that their pay will grow by more than 2% in 2016, but this rises to 29% in the private sector.
Particularly weak pay reviews were again reported at the lower end of the pay spectrum. Those earning less than £15,000 per annum are set to see salaries rise by an estimated 0.7%, but this rises to 1.6% for those earning approximately £35-58K, with the highest earners (above £58,000) seeing a 1.4% increase.