National Minimum Wage Is Going Up in April — Here's What Employers Need to Know

From April 2026, minimum wage rates are increasing across the board — and for many businesses, the rises are more significant than in recent years. If you employ staff at or near minimum wage, whether full-time, part-time, seasonal, or apprentices, now is the time to review your payroll, update your budgets, and make sure your pay structures are compliant before the new rates kick in.

What are the new rates?

Here's a straightforward breakdown of what's changing from April 2026 compared to the current rates:

The National Living Wage, which applies to all workers aged 21 and over, rises from £12.21 to £12.71 per hour — an increase of 50p, or 4.1%.

The 18 to 20 year old rate sees the biggest proportional jump, going from £10.00 to £10.85 — an increase of 85p, or 8.5%.

The 16 to 17 year old rate increases from £7.55 to £8.00 — up 45p, or 6.0%.

The Apprentice Rate also moves from £7.55 to £8.00 — the same 45p increase, or 6.0%.

The Accommodation Offset, which applies where employers provide housing to workers, rises from £10.66 to £11.10 per day — up 44p, or 4.1%.

What about the longer-term plan for younger workers?

The government's stated intention has been to eventually equalise youth minimum wage rates with the National Living Wage, so that all adult workers receive the same statutory minimum regardless of age. However, recent reporting suggests that timeline is now likely to be delayed.

The concern driving that delay is a practical one — rapidly increasing the rate for 18 to 20 year olds could push up hiring costs to a point where employers reduce recruitment in that age group, potentially making youth unemployment worse. The government has indicated it still wants to reach equalisation eventually, but intends to proceed more carefully to avoid unintended consequences in the labour market. So while the direction of travel remains the same, businesses shouldn't expect it to happen quickly.

Why do these changes matter beyond just updating your payroll software?

For some businesses, these increases are relatively modest in isolation. But when you multiply even a small hourly increase across a large or predominantly lower-wage workforce, the cumulative impact on your payroll costs can be significant. The 8.5% rise for 18 to 20 year olds in particular is a notable jump, and businesses in sectors like retail, hospitality, and care that employ a high proportion of younger workers will need to factor this carefully into their budgets for the year ahead.

There's also a compliance dimension that's worth taking seriously. HMRC publishes a list of employers found to have breached minimum wage rules, and the reputational damage of appearing on that list can be considerable. Getting it wrong isn't just a financial risk — it's a public one.

That risk is set to increase further from 2026, with the new Fair Work Agency taking on enhanced enforcement powers over employment rights including minimum wage compliance. The FWA represents a step up in how rigorously these rules will be policed, which makes proactive compliance more important than it's ever been.

What should employers be doing now?

The first step is straightforward — check that your payroll systems are set up to apply the new rates correctly from April 2026. This sounds obvious, but errors in wage calculations are more common than you'd think, particularly where businesses have workers across multiple age groups, variable hours, or complex pay structures.

Beyond the immediate payroll update, it's worth reviewing your employment contracts and offer letters to make sure they don't inadvertently lock you into rates below the new minimums. If you use apprenticeship schemes, check that apprentice pay is correctly classified and that the right rate is being applied at each stage.

For businesses where payroll costs are a significant line item, now is also a good time to revisit your workforce budgets for the 2026/27 financial year and model the full impact of the increases before they land.

We can help

Whether you need help reviewing your current pay structures, want to model the cost impact of the new rates, or just want to make sure your payroll is fully compliant ahead of April — the team at Alera Accounting & Advisory is here to help.

Get in touch today and let's make sure you're ready.