Marvin OnumonuThe median pay award across the economy dropped from 3.4% to 3.0% in the three months to July 2025, according to the latest figures from Incomes Data Research (IDR).
This was the first time the median hit 3.0% since December 2021.
The change was due to fewer employers giving pay rises of 4% or more, and only 9% of awards were worth 4% or above, down from 39% in June.
The biggest group of pay awards, at 53%, were in the 3% to 3.99% range, up from 35% last month.
IDR’s sample for the three months to July included very few awards from the public sector or not-for-profit area, so results mainly reflect the private sector.
Here, the median also fell from 3.4% to 3.0%.
Just 7% of private sector pay awards were worth 4% or more, compared to 38% in June.
Over half, at 54%, were worth 3% to 3.99%, up from 37% last month.
Pay rises between 3.0% and 3.99% were most common in construction, financial services and hospitality.
The drop in the median was mostly due to timing, as the analysis did not include pay awards effective in April, which had risen after the National Living Wage uplift of 6.7%.
This meant the median pay award in the three months to April was higher, at 3.5%.
Zoe Woolacott from IDR said: “April is by far the most popular month for pay setting so the latest median is somewhat less representative of the overall landscape than trends established earlier in the year.”
