Eight quarters of stagnant pay growth coincide with steady decline in UK job vacancies
New data from Brightmine, the HR data and insights provider, reveals that the median basic pay award stands at 3% for the eighth consecutive rolling quarter, with the majority of pay awards lower than the 2024 deal for the same employee group.
A continued tough economic picture
The findings come as the UK’s period of economic uncertainty continues, with the Bank of England reducing interest rates to 4%. Inflation remains well above the 2% target, with CPI at 3.6% and RPI at 4.4% (June 2025), the highest in over a year.
While the latest GDP figures show modest growth of 0.3%, organisations continue to face rising wage pressures and higher employer National Insurance Contributions introduced earlier this year.
Sheila Attwood, HR Insights and Data Lead at Brightmine, comments: “GDP may have risen, but the likelihood is that it won’t drive growth in pay awards. While this improvement is encouraging, employers are continuing to be cautious when it comes to pay awards, with four in five UK employees having received smaller pay awards in 2025 compared to last year. With ongoing uncertainty in the economy, it is likely that the current pattern of pay awards will continue.”
Dampening recruitment landscape
The UK recruitment landscape also remains mixed. Vacancy numbers have been steadily declining since 2022, yet overall levels are still close to those seen before the pandemic, standing around 68,000 lower than early 2020. This fall is partly a correction from the elevated hiring seen during the pandemic, with some organisations keeping an eye on spend by now holding off on recruitment or choosing not to replace departing staff.
Combined with the stagnant 3% pay awards, these trends suggest that while competition for certain specialist roles remains, the broader hiring market is easing and reflects the growing trend of employers pausing recruitment or not replacing leavers.
“The continuation of the 3% headline pay award is a clear sign of prevailing employer pay restraint. And while the Bank of England expects ongoing increases in inflation, many employers are continuing to approach wage decisions with caution, keeping wage rises at 3%, in the face of continued economic uncertainty and the looming Autumn Budget.”
– Sheila Atwood, HR Insights and Data Lead, Brightmine
Brightmine July 2025 pay trends highlights
Brightmine collected details of 19 pay awards that took effect between 1 May and 31 July 2025, covering the pay review outcomes for more than 600,000 UK employees. Headline findings are as follows:
- Majority of settlements are lower than 2024 deals. Based on a matched sample analysis, most (78.9%) 2025 deals are lower than the settlement reached in 2024. This reflects the high pay awards recorded in 2024, while organisations have chosen to introduce more muted pay rises this year.
- Pay freezes remain uncommon. Despite the decreasing pay award levels, pay freezes are not widespread, with just 3.1% of all 2025 deals recorded so far being a freeze in pay.
- Most common basic pay award is worth 3%. An estimated 26.3% of basic pay settlements are exactly 3%, making it the most common award value. Close to three-fifths (57.9%) of basic pay awards were between 2% and 3% (inclusive).
- Median across all awards stands aligned with the headline statistic. When combining basic pay awards and performance-based settlements, the median award stands at 3%.
Pay review pattern – whole economy, July 2024 to July 2025
Written by:
Benchmark with confidence. Lead with insight.
Compare your data to industry benchmarks on turnover, training, compensation trends and more with the Brightmine HR & Compliance Centre.
You may also be interested in…
Example gender pay gap report to help structure yours
Use this practical gender pay gap report model template to structure your narrative, explain your results clearly and …
Is there really such a thing as the perfect pay structure?
Pay structures are under more pressure than ever. Organisations are responding to requests to deliver greater transparency while …
UK gender pay gap reporting: An expert guide
Our expert guide provides clear advice on meeting legal requirements and understanding the value of transparency.