UK employers plan 3% pay rises for 2026, Brightmine says

[LONDON] British employers plan to offer staff pay settlements averaging 3 per cent next year, in line with the most recent agreements, after a temporary increase in the three months to October due to higher public sector pay deals, an industry survey showed.

Human resources data company Brightmine said the median basic pay award in the three months to the end of November was 3 per cent, down from 3.3 per cent in the three months to October.

Three per cent was also the most common expectation for pay settlements that would be reached next year.

“Unless economic conditions improve meaningfully, most organisations are preparing for another year of tight pay budgets. Early indications suggest that 2026 pay awards could potentially edge lower than 2025’s 3 per cent threshold as cost pressures continue to weigh on employers,” Brightmine senior content manager Sheila Attwood said.

The Latest Brightmine survey was based on 18 pay awards covering 118,000 employees between Sep 1 and Nov 31.

About 65 per cent of the latest pay settlements were lower than their equivalent in 2024.

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The Office for National Statistics data for the three months to October showed the weakest private-sector average weekly earnings growth excluding bonuses since December 2020 at 3.9 per cent versus a record 7.6 per cent rise for the public sector.

Pay settlements data is often lower than ONS wage growth data which include impact of job changes, promotions and shifts in employment between sectors

Bank of England policymakers mostly view pay growth around 3 per cent as consistent with getting inflation back to 2 per cent target. REUTERS