Merit Increase

In recruiter context

UK merit increase pools in 2026 typically run 3-5% of total salary cost, distributed unevenly: top performers might get 7-10%, average performers 2-4%, below-average 0-2%. The pool is set company-wide, then distributed by managers based on calibrated performance ratings. The candidate-side mistake: assuming inflation-matching is the merit increase. It usually isn't — most UK companies fold inflation into the merit pool, meaning a 'meets expectations' rating effectively gives you a real-terms pay cut in high-inflation years. The fix is documenting impact, asking explicitly about the merit pool size in 1:1s, and being prepared to argue for an above-average distribution at review time.