New data from Brightmine, the HR data and insights provider, reveals that median basic pay awards have increased slightly to 3.2% for the three months to the end of January. This marks a narrow January boost following a stagnant 2025 where pay awards mostly plateaued at 3%.
Some momentum in early 2026 pay settlements
As UK employers begin 2026 alongside a complex economic landscape, pay decisions are being carefully balanced between financial caution and ongoing talent challenges.
Brightmine analysis shows that around two-fifths of the latest pay awards are higher than the award given in the previous year, pointing to a gradual shift toward more generous pay deals.
While this increase in awards suggests some momentum in pay growth, the broader economic backdrop remains mixed. Although inflation pressures are expected to ease, recent data releases show slow economic growth at just 0.1% in the final three months of 2025. This paired with higher than expected unemployment, may impact employers’ confidence as the year progresses.
Sheila Attwood, senior content manager, data and HR insights at Brightmine, comments: “January’s awards point to a shift towards slightly higher settlements after a prolonged period of stability.
“However, downgraded growth forecasts and rising unemployment projections underline wider economic challenges. Therefore, employers are likely to maintain a cautious approach, carefully weighing affordability against the need to attract and retain talent.
“Affordability is front of mind with the upcoming increases to the National Living Wage in April, which will require higher rises for the lowest-paid workers. These will absorb a larger share of pay budgets and leave less headroom for pay progression elsewhere.”
Brightmine January Pay Trends 2026 Highlights
Our latest analysis reflects 59 pay awards that came into effect between 1 November 2025 and 31 January 2026. The deals represent just over 238,000 UK employees. The headline findings are as follows:
- Median basic pay award shows a stronger start to the year. At a median of 3.2%, the basic pay award median stands marginally higher than the level recorded for the whole of 2025 (3%).
- More generous deals have become common. In the latest quarter, around two-fifths (41.7%) of deals are higher, 37.5% are lower and one-fifth (20.8%) are the same, when compared with the previous award given to the same employee group. Where the latest pay award is higher, the median settlement stands at 3.5%, while deals that are the same or lower than the previous award stand at a median of 3%.
- Widening spread of deals. For the latest quarter, the awards range from 0% to 5%, with pay freezes accounting for a minority (6.8%) of all settlements. While the most common deal across awards is 3%, two-thirds (64.4%) of all settlements are worth between 3% and 4%.
Pay review pattern - whole economy, January 2025 to January 2026
