New research suggests that pay awards in the second quarter of the year have doubled compared to those in the first three months of the year.

New data published by XpertHR shows that pay awards in the second quarter of the year are now worth double those in the first quarter of 2021.

With the median award in the three months to end of March 2021 recorded at just 1 per cent, this has now risen to 2 per cent during the second quarter of the year.

However, the study warns that this acceleration in pay awards is not set to last and has reached its peak for now.

Pay awards within the private sector were shown to have picked up, with the median sitting at 2 per cent for the third consecutive quarter. Within this sector, food manufacturers, chemical companies and retailers continue to record the highest pay awards in 2021 so far.

Conversely, pay awards within the public sector has fallen for the first time in almost three years. This has been attributed to the pay “pause” implemented by the Government for much of the public sector during 2021. The only workers who were exempt from this were NHS staff and workers earning annual salaries below £24,000

Since the 12 months to the end of August 2019, public pay sector growth has been fixed at 2.5 per cent, and notably above the private sector since the end of 2019 but has slipped to 2.3 per cent for the 12 months to the end of June 2021.

However, positively, the proportion of pay freezes overall have declined since last year. In the manufacturing and production sector, pay freezes are now relatively uncommon, with just 7.5 per cent of deals resulting in a nil increase.

The upper quartile for pay awards has also grown to 2.3 per cent, a rise of 0.1 percentage point on the previous rolling quarter.

Sheila Attwood, XpertHR pay and benefits editor, said:

As we navigate the post pandemic world, organisations are understandably still being cautious in their approach to annual pay reviews, and whilst we have seen some growth from the awards made in the early months of the year, we are unlikely to see this level of acceleration continue.

Despite this, it is still encouraging to see the proportion of pay freezes decline in 2021 as confidence returns.


*XpertHR has collected details of 267 pay awards effective between 1 April and 30 June 2021.