UK pay deals break 3% mark

UK pay settlemets have finally broken the 3% mark, according to the monthly research from pay analysts IRS.

The UK median basic pay deal has risen to 3.1% for the three months to September 2005. Revised figures for the previous rolling quarter also put pay deals at 3.1% for the three months to August 2005.

In the three months to September 2005, IRS pay researchers collected information on 123 pay settlements, covering 678,619 employees. Of these, 83 provide an identifiable increase in basic pay.

Other ther key findings include:

  • The range of pay settlements remains unchanged. The upper quartile – above which a quarter of pay deals lie – is steady at 3.5%. The lower quartile – the cut off point for the lowest 25% of pay deals – is also level at 3.0%. Therefore, half of all pay deals continue to fall between 3.0% and 3.5%

  • Public and private sector deals run parallel. Pay awards in both the public and private sector are running at a median 3% in the 12 months to September 2005

  • Service sector deals rise. The median pay award in the private services sector stands at 3.1% in the three months to the end of September 2005. This is unchanged on the revised figure for the quarter to August.  Manufacturing sector pay deals are holding steady, at 3.0%

  • Higher awards than a year ago. Almost six in 10 (58.3%) of pay awards were higher than a year ago, 16.7% paid the same and 25% were worth less

  • Merit budgets remain higher than basic rise. A separate analysis of the 40 pay deals based solely on a measure of performance reveals that the median paybill budget increase stood at 3.5% in the quarter to September 2005.

IRS Pay and Benefits editor, Sheila Attwood said: “Despite some wage pressure early in 2005, pay settlements have remained almost stable for two-and-a-half years. Pay settlements are currently running higher than headline inflation, but price increases are expected to slow over the next year, and will exert a downward pull on pay settlement levels during 2006.”

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