Early evidence shows pay awards remain tightly clustered around 3% in early 2026, according to new data from HR insights provider Brightmine. This snapshot comes against a backdrop of easing inflation and recent signs of economic growth, although pay settlements so far indicate that most employers are continuing to adopt a cautious approach.
Sheila Attwood, Senior Content Manager, Data and HR Insights at Brightmine, comments: “While inflation is continuing to ease and the latest data showing the UK economy returning to growth, this has yet to translate into a meaningful shift in pay awards. Early January settlements suggest most employers are still taking a cautious approach, keeping increases tightly controlled as they balance affordability with ongoing cost pressures.”
Outlook for 2026
Maintaining a trend seen across 2025, a majority of organisations in the latest rolling quarter awarded pay increases that were lower than those given to the same employee group in 2024. Around half of deals fell below last year’s levels, while a further quarter matched previous awards, and only a small number were higher. This pattern highlights the continued cautious approach to pay, with many employers keeping increases modest as they plan for the year ahead.
Attwood comments: “For many organisations, attention is now turning to April. The increase to the national living wage will require higher rises for the lowest-paid workers, absorbing a larger share of pay budgets and leaving less headroom elsewhere. As a result, any movement away from current pay forecasts is more likely to be downward than upward.”
Brightmine December Pay Trends 2025 Highlights
The latest analysis reflects pay awards that came into effect in the final quarter of 2025 (from 1 October to 31 December). The results are based on 10 settlements, which represent around 56,000 UK employees. Due to the small sample sizes, statistics should be interpreted with caution. The headline findings are as follows:
- Median reflects quiet pay bargaining landscape. Due to the limited pay review activity that happens at the end of the calendar year, the median basic pay award for the three months to the end of December 2025 stands at 3.7%, a statistic to interpret with caution due to the low sample size. This is the same as the previous rolling quarter (revised).
- More than half of deals are lower than 2024 award. Maintaining a trend seen across all of 2025, a matched sample analysis indicates that many organisations (57.1%) in the current rolling quarter have provided a pay settlement that is lower than what was given in 2024 to the same employee group. A further 28.6% of deals were the same offering as the previous year and few were higher.
- Deals clustered between 2% and 4%. The lower quartile stands at 2% and the upper quartile 4% for basic pay awards, reflecting the widest interquartile range measured in the past year. This however likely reflects the small sample size, rather than being indicative of a widening spread of deals.
Pay review pattern - whole economy, December 2024 to December 2025
