Marvin OnumonuThree in four professionals said they felt more confident changing jobs for a higher salary than asking for a pay rise in 2026, according to research from Robert Walters.
The research found 74% would rather move to a new role with better pay than negotiate at their current workplace.
Another 72% said worries about tax would put them off going for a pay rise next year.
Chris Eldridge, CEO at Robert Walters UK&I, said: “The last few weeks have seen considerable back-and-forth within the government ahead of the budget announcement on 26 November.
“While recent reports indicate direct tax hikes are off the table, expectations remain that taxes may rise in more subtle ways.
“This ongoing uncertainty is fueling further caution for UK professionals planning pay negotiations in the new year.
“With many now feeling more confident in seeking out new job opportunities to meaningfully increase their post-tax earnings.”
The Fabian Society estimated the Government could raise £12bn by extending the freeze on income tax thresholds, which could push more workers into higher tax brackets even if real incomes do not increase.
Less than half of white-collar workers expected a pay rise in 2026, and 78% said they were open to new jobs next year.
Most pay rises this year were between 0-5% of annual income, and 83% said their pay rise was within that range.
Eldridge added: “This should be a stark warning to the nation’s employers.
“As tax considerations continue to dampen professionals’ pay ambitions in their current company, this could drive an exodus, particularly of top talent, as they look to secure more substantial salaries elsewhere.”
Additionally, Robert Walters found tax relief is becoming more important in benefits packages, with 59% of workers taking it into account.
Gerrit Bouckaert, CEO – recruitment at Robert Walters, said: “The UK is losing ground to several international markets in headline pay and post-tax competitiveness.
“Countries such as Switzerland and the United States sit among the highest on average salary measures, and in a number of European jurisdictions professionals are seeing stronger real-wage recovery than in the UK.
“The upcoming EU Pay Transparency Directive will increase cross-border salary visibility, intensifying competition for skilled talent and making it more important that UK employers try to keep pay and total-reward packages competitive.”
