Although all employment law news and comment is currently dominated by the reforms brought by the Employment Rights Act 2025, it is crucial for employers not to overlook the significant increases to the National Minimum Wage (NMW) and National Living Wage (NLW) scheduled to take effect, following the laying of new draft regulations before Parliament. From 1 April 2026, revised rates will take effect delivering another year of substantial uplifts.
The NLW for workers aged 21 and over will rise from 12.21 to 12.71 per hour – a 4.1% uplift. The NMW for those aged 18 to 20 will increase from 10.00 to 10.85 per hour, representing an 8.5% increase.
| 21 and over | 18 to 20 | Under 18 | Apprentice | |
| April 2025 Rates | 12.21 | 10 | 7.55 | 7.55 |
| April 2026 Rates | 12.71 | 10.85 | 8 | 8 |
These changes form part of a continued pattern of steep annual rises which have gradually reshaped pay structures across many sectors and the economy generally.
For employers, the implications of these sustained increases are becoming more pronounced each year. One clear trend is the rise in pay compression and distortions in pay grading, where the gap narrows between employees paid at or near the minimum rate and those in more skilled roles or supervisory positions. A full time worker on the NMW will soon earn in the region of 25,000 per year before tax, bringing their pay closer to the current median UK salary of around 39,000. Inevitably an NLW/NMW rate increase will be...
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