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Median pay rises hold at 3.5%, IDR finds

More than a third (34%) of all increases were worth 4% or more, up slightly from 33% in April. 

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Pay increases held steady at 3.5% in the three months to May 2026, according to the latest figures from Incomes Data Research (IDR). 

This marked the fifth time in a row the median stayed at this level. 

It had not dropped below 3.5% since December 2025, when it was 3.0%.

IDR looked at 247 new pay deals made between 1st March and 31st May 2026. 

More than a third (34%) of all increases were worth 4% or more, up slightly from 33% in April. 

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The largest group, 48%, saw increases between 3% and 3.99%, down from 49% in April. 

The median in the private sector stayed at 3.5%. 

Pay awards in manufacturing were a bit higher than in private services. 

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The median pay rise in manufacturing and production held at 3.5% since March, with the upper quartile moving up from 4.0% to 4.1%. 

This was due to a higher number of increases worth 4% or more. 

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In March, 20% of increases were at least 4%, rising to 35% in April and 37% in May. 

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These higher awards were common in engineering and food and drink manufacturing.

In private services, the median pay award went up from 3.3% in April to 3.5%. 

A slightly larger share of awards were between 4% and 4.99% – 28% in the three months to May, up from 27% in April. 

The biggest increases were mostly in hospitality and retail, mainly due to the National Living Wage rise.

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Zoe Woolacott from IDR said: “Although the National Living Wage has a less direct impact in manufacturing, compared to private services, we have observed a further increase in the proportion of higher-end pay increases worth 4% or more among manufacturing employers. 

“They still face pressures to offer competitive rates of pay in order to recruit and retain staff.”

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