Minimum wage increases announced
Ahead of the Autumn Budget address on 26 November, the Government has confirmed significant minimum wage increases coming into effect from April 2026. While this is welcome news for younger workers and lower earners, it represents yet another cost pressure for employers already grappling with recent employment cost hikes.
The new rates from April 2026
- 4.1% increase in the main rate – from £12.21 to £12.71
- 8.5% increase for 18–21-year-olds – from £10.00 to £10.85
- 6% increase for 16–17-year-olds and apprentices – from £7.55 to £8.00
In addition, the National Living Wage will be extended to younger age groups over the coming years:
- From 2027, it will apply to 20-year-olds.
- From 2028, to 18- and 19-year-olds.
- By 2029, all workers aged 18 and above will be covered.
Impact on employers
For many businesses, these increases will add further strain to payroll budgets and could exacerbate existing recruitment challenges. Sectors already struggling to attract and retain talent, like hospitality, may find it even harder to compete without passing costs on to customers or revisiting workforce strategies. Careful planning will be essential to manage these pressures effectively.
Minimum wage scrutiny
Since the introduction of the National Minimum Wage, HMRC undertakes enquiries into the minimum wage. These enquiries can be challenging and employers can easily fall foul of the legislation and then find their details being published on the NMW defaulters list. This will intensify with the launch of the Fair Work Agency next April and it will be interesting to see whether HMRC’s NMW team will migrate to the new agency. The agency will have a clear mandate to monitor adherence and enforce penalties for non-compliance, so ensuring your business is prepared is critical.
We’re here to help
If your business is finding it difficult to manage rising employment costs or you need support checking your minimum wage position, our experts are here to help. Get in touch via the form below to discuss your specific circumstances and explore tailored NMW compliance solutions.
