Tech Job Market Thrives as AI Skills Drive Salary Increases

The technology sector is experiencing a significant upswing in job opportunities and salaries, even as redundancies and hiring freezes affect various industries across the UK. New data from jobs platform Totaljobs indicates that tech roles are not only resisting the broader hiring slump but are also contributing to notable salary growth projected for 2026.

According to the report, median advertised pay for tech roles increased by 7.5 percent to just over £33,500. This surge is largely attributed to the increasing demand for skills in artificial intelligence, data analytics, and software engineering. Despite a backdrop of higher taxes, slower economic growth, and regulatory uncertainty, the appetite for these specialist skills continues to grow.

Salaries reflect this demand. The report highlights that Python developers can now earn up to £90,000, with tech architects close behind at £87,500. AI software developers average around £75,000, while senior engineers earn approximately £70,000. These figures starkly contrast with the broader labour market trends, which show signs of softening.

Growing Demand for Tech Skills

The demand for tech-related capabilities is on the rise, as reflected in job advertisements. Mentions of these skills increased by 12 percent between 2024 and 2025, with one in four recruiters identifying AI as the most valuable skill influencing pay and promotions.

The impact on employee earnings is notable, with two-thirds of tech workers receiving pay increases over the past year, significantly above the national average. Hiring intentions are equally optimistic; research from Robert Half reveals that 56 percent of UK companies plan to expand their tech teams during the first half of 2026, despite an uptick in unemployment and a decline in overall job vacancies.

As the tech sector flourishes, a widening pay gap is emerging within the UK job market. Frontline industries such as hospitality, retail, and travel are lagging, with median salaries stagnating around £27,000, which is considerably below the national average. The Totaljobs research suggests that these sectors may continue to fall behind as investments gravitate towards high-skill, high-productivity roles.

Regional Disparities in Salary Growth

The geographical landscape of salaries also reveals disparities. London remains the highest-paying city, boasting a median annual salary of £40,000. However, regional hubs like Oxford, Birmingham, and Leeds are beginning to close the gap as tech and professional services expand beyond the capital.

Luke McKend, managing director at Stepstone Group, commented on the findings, noting a “clear re-calibration” in the labour market. He pointed out that while hiring volumes are softer than during the post-pandemic surge, advertised pay continues to rise, especially for roles requiring advanced technical or AI-driven skills.

The current trends in the tech job market signal a unique divergence from the overall economic landscape in the UK. While many sectors face uncertainty, the demand for skilled tech professionals remains robust, suggesting a promising future for those with the right expertise as the economy continues to evolve.