From 1 April 2026, the National Living Wage increased to £12.71 per hour for workers aged 21 and over. That’s a 4.1% rise—modest compared to recent years, but still significant for small employers.

Younger worker rates rose even faster, with 18–20 year olds seeing an 8.5% increase. Apprentices and 16–17‑year‑olds also received rises, alongside increases to statutory sick pay and family‑related payments.

For businesses with tight margins, the challenge isn’t just the hourly rate—it’s the knock‑on effect on NI, pensions, holiday pay and payroll compliance. Employers must ensure payroll systems are updated correctly and budgets adjusted.

We’re also seeing more businesses reassess staffing levels, pricing, and scheduling as wage costs rise.

Key takeaway: Payroll mistakes are expensive—but planning ahead is cheaper than fixing errors later.