The Government has confirmed the National Minimum Wage (NMW) and National Living Wage (NLW) rates that will take effect from April 2026, following the full acceptance of the Low Pay Commission’s recommendations.

New Rates from April 2026

Effects on Business Owners

The increase to minimum wage rates will result in higher wage bills for employers, especially those with a workforce heavily concentrated in lower-paid roles such as retail, hospitality, social care and other labour-intensive sectors. The rise in the 18-20 age bracket, at 8.5%, may be particularly significant for businesses that rely on younger staff as part of their staffing model.

For many employers, these higher wages will place pressure on profit margins. Businesses operating on tight margins may need to consider how they absorb additional costs, whether through raising prices, streamlining operations or finding internal efficiencies. Some may review their staffing structures, potentially adjusting shift patterns, reducing overtime availability or increasing reliance on part-time or flexible contracts to maintain financial balance.

The changes are also expected to influence hiring practices. With higher entry-level wage costs, employers may become more selective during recruitment and may place greater emphasis on retention to avoid the additional expenses associated with staff turnover. Investment in productivity improvements is likely to become increasingly important, with some businesses exploring new technologies, automation, or enhanced staff training as a way of offsetting wage pressures.

The increase in the apprentice rate will raise the overall cost of apprenticeship programmes, which may prompt some employers to reconsider their scale or structure. However, apprenticeships may still remain attractive due to the long-term benefits of developing skilled staff internally. For employers who provide accommodation as part of employment, the higher accommodation offset cap of £11.10 per day will provide slightly more flexibility in recouping related costs, though businesses must continue to ensure that any deductions do not reduce pay below the statutory minimum.

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