Half private sector pay rises ‘are 5% or more’

Over half (53%) of pay rises in 2023 are worth 5% or more, up from a median pay award across the whole economy of 4% overall last year, according to an analysis by research company Incomes Data Research (IDR). Last year only a third of pay increases were at this level.There is a caveat though: the pay settlement figures analysed are based on a sample of awards effective between 1 January and 31 July 2023. However, very few of them are from the public sector, so the picture they portray should be read as affecting the private sector only.Firms in the private sector are making some of the highest awards, especially those in financial services and retail. IDR notes that the potential for higher increases is great, as many lower-paying employers will have to respond to the National Living Wage rising by 9.7% to £10.42 on 1 April 2023.“The large uplifts in pay that we observed last year have become more commonplace in 2023, with many employers responding to the twin upward pressures of high inflation and recruitment and retention issues,” noted Zoe Woolacott from IDR.“Employers are also providing additional cost of living payments to help support employees at a time when inflation is higher than it has been. These one-off sums are not reflected in our figures for basic percentage pay awards.” https://www.incomesdataresearch.co.uk/resources/press-releases/half-of-employees-set-for-a-pay-rise-of-5-or-more-in-2023