Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

National living wageLatest NewsInflationPay & benefitsPay settlements

Pay awards fail to rise above inflation

by Jo Faragher 21 Jun 2018
by Jo Faragher 21 Jun 2018 There continues to be a shortfall between pay rises and inflation, meaning many still feel worse off
Monkey Business Images/REX/Shutterstock
There continues to be a shortfall between pay rises and inflation, meaning many still feel worse off
Monkey Business Images/REX/Shutterstock

The median pay rise awarded by employers was 2.5% over the past three months – a level that has remained unchanged since the start of 2018.

Pay awards

Forecasts for pay awards in 2018

Average earnings

This is the 21st month in a row that pay awards have been worth less than inflation, according the latest data from XpertHR. The last time pay rises were higher than inflation was in August 2016.

The most common pay award, offered by almost a fifth of employers, was 2%. Just over 12% offered 3%, while only a handful of deals led to employee pay being frozen.

Some higher rises reflected employees receiving the 4.4% increase in the national living wage, or the 3.5% increase in the higher “living wage”, as suggested by the Living Wage Foundation.

However, with retail prices index (RPI) inflation falling this month, the shortfall between wage and price rises has dropped slightly, by 0.8 percentage points.

XpertHR looked at a sample of 219 pay awards made between 1 March and 31 May 2018. Pay awards were highest among manufacturers, who made median awards of 3%. The median rise among private sector services firms was 2.5%.

A quarter of pay deals were worth 2% or less, while a quarter were worth 3.1% or more – the highest this latter figure has been since February 2009.

Around six in 10 awards were worth more than employees received this time last year, while only 14% were worth less than a year ago, found XpertHR.

In the public sector, many employers have delayed recording their awards while they await the publication of civil service pay guidance. Over the 12 months to May 2018, however, the median public sector pay award was 1.3%.

XpertHR’s pay and benefits editor Sheila Atwood said it could be some time before employees feel a real-terms increase in their income.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

“Despite hopes that pay rises are finally catching up with inflation, our latest figures shows that there is still a significant gap between the two,” she said.

“Prices have outstripped pay awards in every month since September 2016, and continue to do so. With pay awards now appearing to have settled in to a new norm of 2.5%, employees are going to continue to become worse off in real terms unless inflation falls further.”

Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. Jo is also the author of 'Good Work, Great Technology', published in 2022 by Clink Street Publishing, charting the relationship between effective workplace technology and productive and happy employees. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

previous post
Violence against retail staff increases 25%
next post
Why the BHS v Burchell decision is still relevant 40 years on

You may also like

Pay awards in real terms could fall for...

21 May 2025

Ryanair demands flight attendants pay back salary increase

21 May 2025

NHS Scotland staff accept two-year 8.2% pay deal

16 May 2025

Nurses threaten strikes if pay demands not met

12 May 2025

Private sector median pay increases remain at 3.5%

6 May 2025

Public sector staff could be in line for...

28 Apr 2025

Confidence returning to jobs market, data shows

28 Apr 2025

What will reward look like in 2035?

28 Apr 2025

NI increase has not caused ‘knee-jerk reaction’ in...

23 Apr 2025

Scottish Water workers strike in dispute over pay

22 Apr 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+