Stagnant Salaries: UK's Wage Growth Hits 3-Year Low

A survey by Brightmine reveals that UK employers held pay increases at the lowest levels since 2021, maintaining a 3% median award. The move comes as businesses grapple with economic pressures, with future wage growth potentially affected by rising social security contributions and a stagnating economy.

In the latest economic update, UK employers have maintained pay increases at the lowest level seen since 2021, with median awards holding steady at 3% in the past three months, according to a new survey by Brightmine. This reflects a trend towards modest pay rises amid economic challenges.

Brightmine has highlighted concerns that an upcoming increase in employers' social security contributions, combined with a hike in the minimum wage, could further impact pay decisions, leading to slower wage growth. Despite a brief economic uptick in late 2024, the Bank of England forecasts a slowdown in pay increases.

While turnover rates remained stable throughout 2024, Brightmine's Sheila Attwood warns that balancing cost control with competitive pay is crucial to prevent potential staffing challenges in the coming year. Effective retention measures could be vital in maintaining workforce stability.

(With inputs from agencies.)