UK pay awards remained broadly stable in the three months to the end of July 2026, with the median basic award standing at 3.2%, according to HR data and insights provider Brightmine.
Despite seeing slower pay activity during the summer months, the findings indicate a continuation of the resilience seen so far across 2026. However, a matched-sample comparison points to greater employer caution: 35% of settlements were lower than the previous year for the same employee group, while 35% were unchanged and 30% were higher.
Cost pressures continue to shape employer decisions
Employers continue to contend with a mixed economic outlook. Inflation has moderated, but concerns about growth persist and higher employer National Insurance contributions continue to add to employment costs. Labour market conditions have also eased slightly overall, with unemployment at 4.9%. Younger workers face greater pressure, with unemployment among 18 to 24-year-olds standing at 14.8%.
Sheila Attwood, HR insights and data lead at Brightmine, comments: “Pay awards remain stable despite continued economicuncertainty. That consistency will offer employers and employees some reassurance, but the fact that more than a third of matched pay awards are now lower than last year does suggest some employers are becoming more cautious. Weighed against the priority from the Andy Burnham government to implement further specific cost-of-living support measures, the consistency is positive.
“Employers are balancing pressure to support household incomes with the need to manage higher costs and a subdued growth outlook. The challenge is to maintain sustainable pay decisions without further reducing recruitment, training and entry-level opportunities, particularly for younger workers.”
Brightmine July Pay Trends 2026 Highlights:
Brightmine latest analysis covers 36 pay awards implemented between 1 May 2026 and 31 July 2026, representing pay settlements for more than 762,000 UK employees. Headline findings include:
- Median pay award remains broadly stable. The median basic pay award for the three months to the end of July 2026 stood at 3.2%, only marginally below the 3.3% recorded in the previous three rolling quarters.
- Pay awards remain concentrated between 2% and 3.99%. More than seven in 10 (71.4%) settlements awarded between 2% and 3.99% (inclusive), while 3% was the single most common award value, accounting for 28.6% of settlements.
- Matched settlements show a mixed picture. 35% of settlements delivered a lower award than the previous year, for the same employee group. An equal proportion (35%) remained unchanged and 30% were higher.
- Most employers continue to favour across-the-board pay rises. Three-quarters (75%) of settlements awarded a uniform pay rise to all employees. Only around one in five (22.2%) were performance or merit based.
Pay review pattern - whole economy, July 2025 to July 2026
