Data from HR data and insights provider Brightmine shows the UK’s median basic pay award has risen to 3.3 per cent in the latest quarter, shifting above the 3 per cent benchmark that has characterised most of 2025. This increase is driven by a series of public-sector agreements effective in August and September.
While the headline figure has increased, the broader pattern across 2025 remains one of pay restraint. Three-quarters of this years’ deals have been lower than those awarded in 2024, and just over six in 10 have been worth 3 per cent or less, reflecting employers’ continued caution.
At the Brightmine November 2025 pay and labour market update webinar, 44 per cent of organisations reported that their 2025 pay increase fell short of employee expectations, underscoring the tension between budgetary pressures and demands for higher awards.
“The move to 3.3 per cent is notable but should be viewed in context,” says Sheila Attwood, Senior Content Manager, Data and HR Insights at Brightmine. “Public-sector settlements have lifted the median for this quarter, but the wider market continues to show a measured and cautious approach. Employers are balancing affordability pressures with employee expectations, and most remain constrained in their pay decisions.”
Looking into 2026, pay expectations remain centred around a 3 per cent increase, with employers signalling another year of controlled and moderate awards. The April 2025 rise in national insurance contributions is also influencing planning, with many employers anticipating a negative impact on next year’s pay decisions.
“Unless economic conditions improve meaningfully, most organisations are preparing for another year of tight pay budgets,” notes Attwood. “Early indications suggest that 2026 pay awards are likely to remain steady – and potentially edge lower – as cost pressures continue to weigh on employers.”
Brightmine November analysis draws on 24 pay awards implemented between 1 August and 31 October 2025, together affecting almost 461,858 UK employees.
- Most awards cluster around the 3 per cent band.A quarter (25 per cent) of settlements delivered increases of between 2 per cent and 2.99 per cent, and an equal share (25 per cent) between 3.01 per cent and 3.99 per cent.
- Deals fall short of last year’s levels. More than half of the latest settlements (53.3 per cent) awarded lower deals than in 2024, with only a small share (13.3 per cent) exceeding last year’s outcomes.
- Public-sector deals comfortably ahead.On our 12-month measure (year to the end of October 2025), the median pay award now stands at 3.8 per cent in the public sector but remains at 3 per cent in the private sector.