Third of UK businesses opting to freeze wages

Date: 18th May 2009

As many as one in three UK businesses opted to freeze wages in April in a bid to protect themselves against the impact of the economic downturn, new research has found.

According to a study into carried out by Data Services, around a third of the 78 pay deals it monitored over the course of the month were wage freezes, with such a trend found to be particularly prominent among businesses operating in the manufacturing and finance sectors.

Notably, this represents an acceleration in the movement towards pay freezes, with just one in five employers found to be taking such a course of action in March.

The report added that "the proportion may rise further, as firms which have 'paused' pay reviews eventually decide to freeze pay rates for 2009".

In addition, pay freezes were also seen in the media and charity sectors, indicating that the recession is beginning to be felt across a wider spectrum of the UK economy.

Just last month, the British Chambers of Commerce reported that 58 per cent of UK companies plan on freezing wages over the next six months, while around 50 per cent are considering making redundancies.