UK total earnings rose 4.4% year on year to April 2026, according to ONS data, and REC's latest survey confirms starting pay is climbing for both permanent and temporary workers. If your hiring budget was set even six months ago, it's already out of date.
The numbers behind the headline
A few figures worth having in front of you before you set your next hiring budget:
- Total UK earnings grew 4.4% year on year to April 2026 (ONS).
- Starting salaries for both permanent and temporary roles rose further at the end of Q2 2026 (KPMG and REC Report on Jobs).
- The National Living Wage rose to £12.71 an hour in April 2026, with employer National Insurance contributions continuing to add to the total cost of a UK hire.
- The average cost of hiring in the UK sits around £6,125 per role before salary is even factored in, according to CIPD.
None of these numbers are dramatic in isolation. Stacked together, they mean the true cost of a UK hire has moved meaningfully since you last priced one, and budgets built on last year's assumptions are quietly under-provisioned.
Why this is happening now
Wage growth in 2026 isn't a single-cause story. Employer National Insurance changes introduced in April pushed up the cost of employment generally, which has fed through into what employers need to offer to remain competitive. At the same time, the labour market's cautious recovery, more temp billings, easing permanent decline, means employers are competing harder for the candidates willing to move right now, which itself puts upward pressure on offers. Add a live compliance environment, with the Fair Work Agency now enforcing pay-related rights, and there's less room than there used to be for offers that don't reflect the real cost of employment.
What this means for your hiring plan
The instinct when costs rise is to slow down or cut corners on the process. Both tend to backfire. Slowing down in a market where the best candidates are moving again just means losing them to someone faster. Cutting corners on vetting to save time increases the odds of the kind of costly mismatch we cover in our piece on what a bad hire actually costs UK founders.
The more useful response is to separate the cost of the person from the cost of everything wrapped around them, National Insurance, pension contributions, recruitment fees, onboarding time, management overhead, and get a genuinely accurate picture of what a role costs before you commit to a number. Founders who've done that exercise are often surprised by how much of their hiring budget was never really about the person's take-home pay at all.
FAQ
How much have UK salaries actually risen in 2026? ONS reported total earnings up 4.4% year on year to April 2026, with REC confirming continued upward movement in starting pay for both permanent and temporary roles through Q2.
Is this rise driven mainly by the National Living Wage increase? It's a contributing factor, particularly at the lower end of the market, but broader competitive pressure and rising employer National Insurance costs are pushing salary expectations up across the board, not just at minimum wage roles.
Should I delay hiring until salary pressure eases? There's no strong signal that pressure will ease in the near term. Delaying tends to cost more in lost momentum and lost candidates than it saves in salary.
What's the real all-in cost of a UK hire, beyond salary? Once you add employer National Insurance, pension contributions, recruitment costs and onboarding time, the true cost of a hire typically runs 30 to 40% above the advertised salary.
How can I budget more accurately for my next hire? Start from total cost to company, not headline salary, and build in a realistic timeline for the role to become fully productive, which is usually longer than most budgets assume.
Sources
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