· Features

Low pay rises forecast for 2021

Employers in the private sector are expected to increase pay by an average of just 1% in the year ahead as a result of COVID-19.

Pay rises have been falling over the past 12 months, with average pay rise now worth 2.2% down from 2.5% this time last year, research from pay analysts XpertHR found.

Most employers said they were likely to issue pay freezes, with nearly half (44.8%) of private companies saying they do not expect to increase staff wages.

Furlough scheme makes pay cuts the norm

Post-pandemic pay cuts on the horizon, bosses warn

Businesses fear loss of top HR professionals as a result of pay squeeze

Looking to 2021, XpertHR said that against the background of the coronavirus pandemic many employers in the private sector are “proceeding with caution”.

Sheila Attwood, XpertHR pay and benefits editor, said: “The devastating impact of the coronavirus pandemic on company finances has seen the value of pay rises fall to the floor over the past few months.

“Many employers are not optimistic that they will be in a position to award a pay rise in 2021, with a pay freeze easily the most expected outcome of any pay review next year.”

However, the research also showed that manufacturing and production employers are predicting higher pay rises than the private sector overall, at a median 1.5%

The research was based on the pay of 1,600 private organisations.

Figures from the Office for National Statistics (ONS) reported that the number of redundancies in the UK had accelerated at the fastest pace since the financial crisis in 2007-2008.