As we move through the 2025/26 pay year, NHS staff and their unions are already turning their attention to the next pay round for 2026/27. The central demands are expected to focus on a significant, above-inflation pay rise and a long-term commitment to pay restoration. This follows years of pay awards that unions argue have not kept pace with the rising cost of living, leading to a substantial real-terms pay cut for healthcare workers since 2010.
How the annual NHS pay rise is decided
For most NHS staff in the UK, pay is determined by the Agenda for Change (AfC) framework. The annual pay rise process follows a well-established, year-long cycle. It’s not a simple negotiation between employers and unions.
The key steps are:
- Evidence submission: NHS unions (like UNISON, the RCN, GMB, Unite and the RCM), NHS Employers, and government health departments across the UK all submit detailed evidence to an independent body.
- The Pay Review Body (PRB): This independent body, officially the NHS Pay Review Body, weighs all the evidence. It considers factors like inflation, the cost of living, recruitment and retention challenges, staff morale, and government affordability arguments.
- Recommendations: The PRB produces a report with recommendations for the government. This report is confidential until the government is ready to announce its decision.
- Government decision: The government of the day makes the final decision. While they usually follow the PRB’s main recommendation, they are not bound to do so and can choose to award a different amount.
- Implementation: The pay award is typically effective from 1st April. Because the announcement often comes in the summer, the increase is backdated, usually appearing in payslips in late summer or early autumn.
It's important to note that doctors and dentists have a separate pay review body (the DDRB) and are not covered by the AfC award.
Context: A look at recent pay awards
To understand the unions' position for 2026/27, it helps to look at the awards from previous years. These have often been the subject of intense negotiation and, at times, industrial action, as they have frequently fallen below the rate of inflation.
Here’s a brief summary of the headline pay awards in England for staff on AfC contracts:
| Pay Year | Pay Award Details |
|---|---|
| 2023/24 | A 5% consolidated increase, plus a one-off, non-consolidated payment (dubbed the 'NHS Recovery Bonus'). |
| 2024/25 | A 5.5% consolidated increase. |
| 2025/26 | A 3.6% consolidated increase, effective from 1st April 2025. |
Unions have consistently argued that these figures represent a real-terms pay cut when measured against high inflation rates during these periods. This history of below-inflation awards is the driving force behind the central demand for “pay restoration.”
What are the unions asking for in 2026/27?
While the exact percentage claims for 2026/27 are yet to be finalised, the core principles of the union position are clear and consistent. They are built around three main pillars.
1. An above-inflation pay rise
The immediate priority for all health unions is to secure a pay rise that is significantly above the projected rate of inflation for 2026. This is seen as the bare minimum required to stop the value of NHS pay from falling even further behind the cost of living. Unions will be looking at both the Consumer Price Index (CPI) and Retail Price Index (RPI) to make their case.
2. A long-term plan for pay restoration
This is the big-picture goal. Pay restoration refers to the ambition of returning NHS salaries to the real-terms value they held before the period of austerity began around 2010. Different unions calculate the loss slightly differently, but most analyses suggest that the value of AfC pay has eroded by 15-20% over the last 15 years. A pay restoration claim isn't just about a single year's award; it's a call for a multi-year strategy of above-inflation rises to close that gap over time.
3. Structural reform of the Agenda for Change bands
Many unions are also pushing for a fundamental review of the AfC pay structure. They argue that the current system, now over two decades old, has several problems:
- Pay band overlaps: The starting salary of one band can be very close to the top of the band below it, which unions argue devalues promotion and added responsibility.
- Slow progression: It can take several years for staff to reach the top of their pay band, which can impact morale and retention.
- Low starting salaries: There is a strong feeling that the starting salaries for entry-level roles (particularly at Band 2) are no longer competitive, making it hard to recruit new staff.
For individual staff, moving up a band is the most significant pay rise you can achieve. If you're aiming for a promotion in the next year, making sure your application is as strong as possible is crucial. Our Application Copilot can help you craft a compelling supporting statement that maps your skills and experience directly to the person specification for that next-level role.
What does this mean for your salary? A worked example
The final percentage makes a real difference to your monthly budget. Let’s take a simple, hypothetical example to see how an annual award works.
Imagine Aisha is a Band 5 nurse, working full-time. She is at the top of her band, with a basic salary of £34,581 as of April 2025.
If the 2026/27 award was, for example, 3.6% (the same as the 2025/26 award), her new basic salary would be calculated as follows:
£34,581 x 1.036 = £35,826.04
This represents an annual increase of £1,245.04, or about £103.75 per month before tax, National Insurance, and pension contributions. While every increase is welcome, unions will argue that in a high-inflation environment, such a rise may not be enough to cover increasing household costs.
You can use our NHS take-home pay calculator to model how different percentage rises could affect your own net pay, once the official pay scales are released.
The road ahead: What happens next?
The pay-setting process is a long one. Here’s a rough timeline of what to expect:
- Autumn/Winter 2025: Unions will consult with their members to finalise their pay claim and prepare their evidence for the PRB.
- Winter/Spring 2026: The PRB will receive and analyse evidence from all parties, including unions, NHS Employers and the government. They may also hold meetings to hear oral evidence.
- May/June 2026: The PRB is expected to submit its confidential report and recommendations to the government.
- Summer 2026: The government will consider the report and announce its decision on the pay award for 2026/27. This is often done just before Parliament’s summer recess.
- Summer/Autumn 2026: The pay rise, backdated to 1st April 2026, will be processed by NHS payroll departments and appear in staff payslips.
Keep an eye on announcements from your union and look for official updates on the NHS Employers and gov.uk websites. Should the government's final award be rejected by union members, a period of industrial dispute could follow.
Key takeaways
- NHS unions are preparing their pay claim for 2026/27, focusing on an above-inflation rise and a long-term plan for pay restoration to make up for value lost since 2010.
- The final decision on pay is made by the government, based on recommendations from the independent NHS Pay Review Body (PRB).
- Recent pay awards have struggled to keep pace with the high cost of living, which is the main driver behind union demands.
- Alongside a headline percentage, unions are also calling for structural reforms to the Agenda for Change pay bands.
- The pay-setting process takes many months, with a final announcement not expected until summer 2026. The award will be backdated to 1st April 2026.