Over half of employers are already planning pay awards of less than 3% next year, despite inflation uncertainty
UK employers are signalling a more cautious approach to pay rises next year based on early forecasts, with just over two-fifths (41.6%) expecting their organisation’s 2027 pay award to be worth more than 2% but less than 3%, according to the latest data from Brightmine, the HR data and insights provider.
The findings suggest the period of elevated pay settlements seen in recent years may be beginning to ease, as organisations balance affordability concerns with ongoing economic uncertainty. A further 41.6% of HR professionals expect pay awards to fall between 3% and 4%, while just 2% anticipate awards above 4%. This would mark a notable change after a prolonged period where most pay awards have clustered tightly between 3% and 4%.
Sheila Attwood, Senior Content Manager, Data and HR Insights at Brightmine, comments: “While many employers are currently planning for lower pay awards in 2027, this week’s inflation figures highlight why there is still significant uncertainty around next year’s settlements.
“With inflation still above the Bank of England’s 2% target and close to the current median pay award, employers may come under renewed pressure to go further than they are currently planning to support employee living standards.
“For now, pay awards remain remarkably stable, with most organisations continuing to award increases between 3% and 4%, but the picture for 2027 remains uncertain, and these early forecasts may shift as inflation and affordability pressures evolve.”
– Sheila Atwood, Senior Content Manager, Data and HR Insights, Brightmine
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