Minimum Wage Increases – What UK Businesses Should Know

 

After the much-anticipated Autumn Budget, one key headline was the national living wage and minimum wage increases for workers – therefore impacting business owners.

According to the latest announcement from the Low Pay Commission (LPC), the UK’s statutory minimum wage rates will increase from 1 April 2026.

 

WHAT’S THE NATIONAL LIVING INCREASING TO?

From 1 April 2026, the national living wage for workers aged 21 and over will increase by 4.1%, rising from £12.21 to £12.71 per hour. This is equivalent to approximately £900 more per year for a full-time employee.

 

what are the new rates INCREASING TO?

Minimum wage for those aged 18 to 20 will rise by 8.5%, increasing from £10.00 to £10.85 per hour, which represents around £1,500 extra per year for someone working full-time.

For 16 and 17-year-olds, as well as apprentices, the minimum wage will increase by 6%, from £7.55 to £8.00 per hour.

 

For visual representation, you can find the new changes happening from April 2026 in the table below:

Age / Category	New Rate (from April 2026)	Increase / Change
National Living Wage (21 and over)	£12.71/hr	Up 50p (≈ 4.1%)
18–20 year olds	£10.85/hr	Up 85p (≈ 8.5%)
16–17 year olds	£8.00/hr	Up 45p (≈ 6.0%)
Apprentices (under 19 or first year)	£8.00/hr	Up 45p (≈ 6.0%)

 

Under these new changes, it’s worth noting the Accommodation Offset (for employees provided with accommodation) is also increasing to £11.10 per day from April 2026 – an increase from 2025’s £10.66 daily rate.

These changes reflect the Government’s formal acceptance of the LPC’s recommendations.

 

WHY DOES THE INCREASE MATTER TO BUSINESS OWNERS?

For many employees, especially those previously on the minimum wage, this represents a substantial pay rise – helping to protect living standards amid rising living costs.

For businesses, it means recalculating payroll costs, budgets, and potentially revising pricing, staffing or scheduling to accommodate the higher wage base. Because this is a mandatory adjustment, for workers whose pay reference period begins on or after 1 April 2026, the new rates must apply.

 

WHY “TC GrOUP PAYROLL” SHOULD BE YOUR GO-TO PAYROLL PARTNER

If you find statutory changes — like minimum wage increases, accommodation-offsets, age-bands, and payroll timing — confusing and time-consuming, then outsourcing to a specialist makes sense.

That’s where TC Group Payroll comes in. We can handle:

• Automatic updates so your payroll matches statutory minimum wage changes
• Accurate tax and National Insurance calculations
• Digital or printed payslips — whatever works best for your team
• Compliance, reporting, and deadline-driven filings

 

To put it simply, let TC Group Payroll take the stress out of wage changes and payroll compliance.

We stay on top of every update, every rule, and every rate so you don’t have to. Save time, avoid mistakes, and let our experts run your payroll accurately and on schedule.

For smooth, efficient and completely compliant payroll processing, get in touch for a free, no-obligation consultation to find out how we could support you and your business.