The median pay award across the economy fell to 4% in the three months to July 2024, down from 4.8% in June, according to research by Incomes Data Research (IDR).
Its latest analysis, which is based on a sample of 39 awards between 1 May and 31 July 2024, covering more than 700,000 employees, found that this was the result of a downward shift, as fewer employers paid increases worth 6% or more. Despite this, the median pay award was higher than Consumer Prices Index and Retail Prices Index levels, which stood at 2.2% and 3.6% respectively in the year to July.
More than half (56%) of pay awards were worth between 4% and 4.99%, which has doubled since June. Awards between these figures occurred most commonly in construction, financial services, food and drink manufacturing, and retail. Meanwhile, 5% of pay rises were worth 6% or more, down from 20% in the three months to June, 18% were worth between 3% and 3.99%, and 15% were worth between 5% and 5.99%.
The results mainly reflect the private sector, as very few awards were from the public and not-for-profit sector. In the private sector, the median fell from 4.8% to 4.4%.
The analysis highlighted that this is due to timing, as the latest figures do not include awards effective in April, where some 16% of awards were worth 9% or more due to the 9.8% national living wage rise. The overall trend in pay awards is down from the start of the year, when the median stood at 5%.
Zoe Woolacott, senior pay researcher at IDR, said: “Prices for items such as food, as well as mortgages and rents, remain higher than before the pandemic. This maintains pressure on employers to award their workers with a pay rise that compensates them to some extent for the higher cost of living.”
