Brightmine’s latest figures indicate a modest uptick in UK pay settlements at the start of 2026, with the median basic pay award rising to 3.2% for the three months to the end of January. According to Brightmine’s February 2026 report, this marks a small recovery from a year in which pay increases largely hovered around 3%.

A year of restrained growth in 2025

That relative improvement follows a longer period of restrained pay growth across 2025, when Brightmine’s monitoring returned the median basic award to 3% and found most settlements clustered between roughly 2% and 4.2%. Industry analysis last year repeatedly showed pay awards were frequently lower than those given to the same employee groups in 2024, underlining the tight control organisations exercised over payroll budgets.

Brightmine’s trend data also shows signs that a growing share of deals are slightly more generous than a year earlier; roughly two-fifths of the most recent awards exceed the prior-year level, a shift that suggests employers are beginning to relax the strictures that dominated 2025.

Economic headwinds temper confidence

The emerging pay momentum comes amid a mixed macroeconomic picture. Brightmine points to subdued output growth, with GDP expanding only marginally in the final quarter of 2025, and a labour market that has shown higher-than-expected unemployment. These factors are likely to temper employer confidence and constrain the pace of wider pay rises.

“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,” said Sheila Attwood, senior content manager, data and HR insights at Brightmine, in commentary accompanying the report.

Sector exceptions: healthcare stands out

Sector-level exceptions continue to appear. Publicly announced settlements for healthcare staff delivered above-average uplifts last year, with NHS Employers confirming consolidated increases for Agenda for Change staff and for doctors and dentists that exceed the median private-sector deals, reflecting ongoing recruitment and retention pressures in the sector.

2026 outlook: cautious recalibration

For employers and pay negotiators, the picture for 2026 is therefore one of cautious recalibration: modestly higher settlements in early rounds, but constrained by affordability pressures, statutory wage changes and a fragile growth outlook that will make widespread pay acceleration unlikely in the near term.

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