Hi, we are required to submit our country budgets shortly for 2026 - this year we awarded 2.2% and 2.1% to the UK & Ireland respectively. We are doing our own research, but I was just wondering what other people's thoughts were on the 2026 increase given everything that's been happening in the economy the last couple of years? Thanks!
Thank you all for your comments! we are not seeing a massive impact on external recruitment, but internally the gap is closing between those on NLW and those slightly higher as the rate of increase is not following the NLW. Plus inflation and cost of living rising generally, our people are feeling the impact.
Our salary increases are managed centrally by our global corporate head office using local data. It will be interesting to see what increase we are allocated for 2026. Generally it feels like salaries are not keeping up with inflation. I'm curious, what is the impact within your companies, is this having a negative impact on engagement, retention, recruitment?
HI - we are seeing 3rd party market data points around 3.5%, like Kate says. I saw the LPC report giving a central estimate of 4.1%. So there or thereabouts, depending on your workforce composition, market positioning and affordability etc etc etc.
Hi Harriet. We're seeing that salary budget surveys are projecting median increases of around 3.5% (across all industries) for both the UK and Ireland, which will likely be our starting point. Affordability is a challenge, especially as we aim to keep pace with the National Living Wage. A higher budget does help us manage the pay compression that tends to follow to some extent, but it's a delicate balance.