PAY rises have stalled for UK employees showing a decline in the rate of awards last year.

Awards in 2014 ended the year below where they started, with the median basic pay rise for UK employees standing at 2% in the three months to the end of December 2014.

This compares with a 2.4% award recorded in the first quarter of last year. And private-sector employers surveyed have predicted a 2% median pay award over the year to August 2015.

The latest figures from pay analysts at XpertHR continue to reflect the subdued nature of pay bargaining within UK businesses.

Other key findings from XpertHR’s latest quarterly analysis of pay awards include:

• The middle half of pay awards effective in the three months to 31 December 2014 are worth between 1.6% and 3%;
• The most common pay award was a 2% increase;
• Within the private sector, manufacturing-and-production companies continue to offer higher pay rises, at a median 2.8%, than those operating in private-sector services, where pay awards are typically worth 2%;
• Pay freezes account for just 6% of all pay awards;
• Pay awards in the public sector were worth a median 1.5% in the 12 months to the end of December 2014, compared with 2% in the private sector over the same period.

Pay award levels have also fallen below the level of both retail prices index (RPI) and consumer prices index (CPI) inflation, which stood at 1.6% and 0.5% respectively in December 2014. While this provides some welcome news for employees, the level of pay awards remains low and shows little sign of upward movement.

XpertHR pay and benefits editor Sheila Attwood said: “The fact that pay awards are worth more than inflation is good news for employees, but this is due to falling inflation rather than an increase in the level of pay rises, which remain at just 2%. Details of the first pay awards for 2015 suggest that this trend for subdued pay awards is going to prevail.”