According to People Management website, the median pay settlement across the UK is holding steady at 2.5%, according to the latest figures from Incomes Data Services (IDS).

Almost three-quarters of pay deals in the three months to August 2012 were in the 2% to 3.99% range, the statistics showed.  The most commonly agreed increase remained stagnant at 3%, while the proportion of higher-end awards – at or above 4%– continued its fall since the beginning of this year.

IDS said that despite continued economic uncertainty, pay settlement levels had been relatively stable since the beginning of 2012 and that falling inflation meant the gap between pay awards and the rising cost of living was narrowing.

IDS data covers 450 pay settlements which have come into effect so far in 2012, covering nearly five million employees. The median settlement for the year overall was 2.75%.  But deals received earlier in the year were higher on the whole, possibly due to the higher inflation in 2011, added IDS.

“Despite the return to recession, we’ve found that pay settlements in 2012 have held up at around the levels we forecast last year, between 2.5-3%,” explained Alastair Hatchett, Head of Pay and HR Services at IDS.  “Part of the reason for this is that we are operating in a ‘two-speed’ economy, in which some sectors are struggling but many others such as energy, pharmaceuticals and car manufacture are performing well and able to pay increases at a higher level.”