The annual growth in employees’ average earnings, excluding bonuses, was 5% in March to May 2025, according to the latest findings by the Office for National Statistics (ONS).
Annual growth for both regular and total earnings, including bonuses, for the same period was also 5%. Meanwhile, annual average regular earnings growth stood at 5.5% for the public sector and 4.9% for the private sector.
The ONS found that median monthly pay for June this year was £2,522, which is a 5.6% increase compared with June 2024.
In addition, annual growth in median pay in June was highest in the accommodation and food service activities sector following a 7.3% increase, and was the lowest in the professional, scientific and technical sector, with a 3.4% increase.
Liz McKeown, director of economic statistics at ONS, said: “The labour market continues to weaken, with the number of employees on payroll falling again, though revised tax data shows the decline in recent months is less pronounced than previously estimated. Pay growth fell again in both cash and real terms, but both measures remain relatively strong by historic standards.”
Joanne Frew, global head of employment and pensions at DWF, added: “With the rise in employer national insurance contributions, wage growth has begun to level off as businesses look to manage costs. The ONS also reported that the UK’s inflation rate has risen to 3.6% in the year to June, an increase from 3.4% in May. This unexpected increase will put pressure on employers to raise pay as employees’ purchasing power drops.
“With the cost-of-living crisis biting, employers will need to find new and innovative ways to help support their staff and inspire loyalty in a volatile market. Building a positive culture, engaging employees, and communicating transparently are key to staying competitive.”
Julia Turney, partner and head of platform and benefits at Barnett Waddingham, said: “Employers are facing rising expectations from financially stretched workforces demanding greater flexibility, support, and purpose. In this environment, maintaining stability will depend not just on cost control, but on clarity. Data will be the guiding compass, offering the insight leaders need to make smarter workforce decisions, respond to emerging risks, and sustain long-term pressures that are seemingly ever-present.”
