Pay trends 2026 | October Report

Pay awards edge up to 3.1%, but most deals fail to beat last year.

UK pay awards remain firmly constrained despite a marginal rise in the latest three-month figures, according to HR data and insights provider Brightmine.

The median basic pay award in the three months to the end of September stood at 3.1%, up slightly from 3% in each of the previous two rolling quarters. Despite this slight increase, pay settlements remain tightly clustered, with almost two-thirds (61.9%) worth between 3% and 3.99%.

The latest analysis also shows that more than seven in 10 settlements either matched (36.8%) or fell below (34.2%) the award given to the same employees a year earlier. Fewer than three in 10 (28.9%) received a higher award.

2027 pay awards expected to remain at 3%

The latest findings are consistent with Brightmine pay forecasts research, which indicates that awards are likely to remain stable over the next 12 months.

Employers are forecasting a median pay award of 3% in the year to 31 August 2027, with affordability and increased employer National Insurance contributions continuing to constrain budgets.

Sheila Attwood, Senior Content Manager, Data and HR Insights at Brightmine, comments:

“Pay awards have edged up, but there is little evidence of a significant shift in the overall picture. The median has risen to 3.1%, yet most employees are receiving the same or a lower award than they did last year.

“Looking ahead, the latest Real Living Wage increase adds another consideration for employers planning their 2027 pay reviews. While it is unlikely to affect many pay decisions immediately, the 4.8% rise is above both the current median pay award and the 3% median forecast for next year. This could create additional pressure on budgets at the lower end of the pay structure, with some employers also needing to consider how to maintain pay differentials between lower-paid employees and those in more senior or skilled roles.

“With affordability continuing to constrain budgets, employers will need to balance the pressure to maintain fair and competitive pay with what they can realistically afford.”

Sheila Attwood, Senior Content Manager, Data and HR Insights at Brightmine