Home Business News First pay settlements of 2024 see median award fall to 5.1% as UK falls into recession

First pay settlements of 2024 see median award fall to 5.1% as UK falls into recession

by Amy Johnson LLB Finance Reporter
21st Feb 24 9:41 am

The latest pay settlement data from XpertHR shows that the median basic pay award for the three months to the end of January 2024 is 5.1%, down from 6% in the previous rolling quarter.

However, with the latest Consumer Prices Index (CPI) figures showing a sustained decline in inflation from 10.1% in January 2023 to 4% in January 2024, pay awards had been expected to follow suit.

The research from XpertHR already reflects this, with around half of pay awards in a matched sample analysis worth less than the previous year’s settlement.

Sheila Attwood, XpertHR senior content manager, data and HR insights, said, “There are signs that the 6% headline pay award recorded during 2023 will not be matched in 2024 pay reviews.

“We are already beginning to see that around half of employee groups are receiving settlements worth less than their previous award, where high awards were provided to account for the rising cost of living affecting UK employees at the end of 2022 and throughout 2023.

“While the median has fallen, it is still elevated by historical standards, with pay awards having not been consistently at this level since 1991.

“And there are still some inflation-busting deals being made – one-fifth of reviews were worth at least 7%, and as inflation falls, our headline measure now sits above both RPI and CPI inflation.

“The financial pressure from high inflation levels and elevated pay awards budgets in 2023 may mean that organisations will be limiting their budgets in 2024 in response.

“For deals coming into effect in January 2024, we have already recorded a media pay settlement of 5% – which is slightly lower than our headline figures for the current rolling quarter.”

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