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Latest NewsPay & benefitsPay settlements

Pay awards remain at 2.5% in first six months of 2018

by Ashleigh Webber 26 Jul 2018
by Ashleigh Webber 26 Jul 2018

The average pay deal stabilised at 2.5% over last six months, as employers continue to make higher pay awards than last year.

XpertHR analysis of 272 pay settlements made between 1 April and 30 June found that despite 2% remaining the most common pay award – with 21.7% of awards at this level – 62.6% of settlements were higher than what employees received at their previous review.

Pay awards

Forecasts for pay awards in 2017-2018

XpertHR pay and benefits editor Sheila Attwood said: “The last time pay awards stabilised at a figure above 2% was in December 2008.

“The current run of higher pay awards looks set to continue as we head into the quieter months of the pay bargaining year. The increases recommended by the pay review bodies will also provide a welcome boost to pay award levels in the public sector.”

The median pay award was 1.7% in the public sector. It said this was likely to have been influenced by high increases for local authority workers and pay rises for the lowest paid workers within NHS England – Agenda for Change staff will see increased starting salaries across all pay bands – including a 13.3% rise on the lowest pay scale.

Average public sector pay settlements could be set to rise further as the government announced pay increases of between 2% and 3.5% for one million workers earlier this week – including those in the armed forces, NHS and teachers.

Last year Theresa May announced she would end the 1% cap on public sector pay awards that had existed since 2013.

Pay awards in the manufacturing and production sector were the highest, at a median of 3%. This compares with a median 2.2% rise in the three months to the end of June 2017.

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Deals in private sector services firms were worth 2.5%, up from 2% seen a year ago.

Only 13% of pay awards were lower than the rate employees received last year. A quarter were worth 2% or less, while a quarter were worth 3.1% or more.

Ashleigh Webber

Ashleigh is a former editor of OHW+ and former HR and wellbeing editor at Personnel Today. Ashleigh's areas of interest include employee health and wellbeing, equality and inclusion and skills development. She has hosted many webinars for Personnel Today, on topics including employee retention, financial wellbeing and menopause support.

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