Innecto report: Insights Autumn 2026 Report
The Innecto Insights Autumn 2026 Report highlights a complex UK economic landscape where cooling labour demand, modest growth and rising energy-driven inflation create tough conditions for reward strategies.
Interest rates hold at 3.75%, while wage growth has flatlined, regular pay rose by 3.5% in June 2026, and real earnings growth remains sluggish at 0.5%. Meanwhile, median pay awards have stabilised at 3.3%, with future employer expectations anchored at 3.0%.
Against this backdrop, pay compression has emerged as a major structural challenge. Over half of UK organisations now report pay compression issues. This trend collapses wage gaps between entry-level staff, experienced peers, and first-line managers, eroding motivation for career progression and internal talent pipelines.
Driven by continuous statutory wage rate increases, such as the National Living Wage and the National Minimum Wage, baseline pay is rapidly outpacing median merit budgets.
Find out more about the impact of pay compression in the Innecto Insights Autumn 2026 Report.
Supplied by REBA Associate Member, Innecto Reward Consulting
The UK’s largest independent pay and reward consultancy, transforming pay into performance.
