New data from Brightmine, the HR data and insights provider, reveals continued stability in UK pay settlements, with the median basic pay award holding firm at 3% in the three months to the end of April 2025. However, beneath this consistency, there are signs of softening, with almost half of all awards now falling below the 3% mark.
Cost pressures persist despite early signs of recovery
April brought a wave of cost increases that impacted both employers and households. Labelled by some as “Awful April”, hikes in council tax, utility bills, and changes to employers’ National Insurance contributions have all placed fresh strain on pay decisions.
This caution comes despite some positive economic news. The latest figures indicate that the UK economy grew by 0.7% in the first quarter of the year, a stronger than expected rebound after months of stagnation. However, this growth is not yet reflected in pay outcomes and may be masking broader economic fragility.
Sheila Attwood, HR Insights and Data Lead at Brightmine, comments: “April’s figures are critical in setting the tone for pay deals throughout the year. And while the latest economic data show signs of growth, the subdued pattern of pay settlements indicates that many employers continue to approach wage decisions with caution in the face of ongoing cost pressures that will continue into the second half of the year. Pay awards are stable, but beneath the surface, many businesses are opting for lower rises and our headline median could therefore fall in the months ahead.”
Public vs private sector: Pay divergence set to narrow
Caution around the economy is reflected in data showing the gap between public and private sector pay awards. The private sector recorded a median pay award of 3% in the 12 months to the end of April 2025, in line with the overall trend across the UK economy. In contrast, the public sector median remains higher at 5%, largely due to legacy deals agreed earlier in the pay cycle.
However, early indications suggest that public sector settlements in 2025 will be more closely aligned with private sector norms, signalling a marked shift from last year’s higher increases.
“The data shows that while the public sector appears to be ahead on paper, this reflects past decisions rather than current trends,” said Attwood. “Looking ahead, we expect public sector pay awards to mirror the more restrained approach we are now seeing in the wider economy.”
Brightmine April 2025 Pay Trends Highlights
Brightmine collected details of 136 pay awards that took effect between 1 February and 30 April 2025, covering the pay review outcomes for more than 309,000 employees. Headline findings are as follows:
- Majority of 2025 deals are lower than the 2024 award. In a matched analysis, 78.1% of deals were lower than the previous year, while just 3.1% were higher.
- One in 20 deals are pay freezes. Around one in 20 deals (5.1%) that came into effect in the latest quarter are pay freezes.
- Median of all deals is 3%. Across both basic and performance-based pay awards, the median stands at 3%, indicating that pay budgets are consistent regardless of how pay awards are structured.
- Most common deal is worth 3%. The most common pay award in the dataset is for a 3% increase, but this is followed by a 2% pay rise.
Pay review pattern - whole economy, April 2024 to April 2025
