From April 2026, the UK Government is set to implement significant changes to the National Minimum Wage (NMW) and National Living Wage (NLW) rates.

These increases will affect a wide range of businesses across various industries, especially those with employees earning at or near the minimum wage.

Here’s an overview of the key changes and what businesses need to know to stay compliant.

Key changes to the National Minimum Wage and National Living Wage

As of April 2026, the new rates for the National Minimum Wage and National Living Wage will be:

  • National Living Wage (for workers aged 21 and over): £12.71 per hour
  • National Minimum Wage (for workers aged 18 to 20): £10.85 per hour
  • National Minimum Wage (for workers aged under 18): £8.00 per hour
  • Apprentices (aged under 19 or in the first year of apprenticeship): £8.00 per hour

These new thresholds mark a considerable increase compared to previous years and it is important that your payroll processes are compliant from day one.

You should also assess the impact of these new rates on your employment costs, as part of your wider business planning.

Impact on Statutory Pay Rates

Alongside the changes to NMW and NLW, employers should be aware of related statutory rate increases that will come into effect. These include:

  • Statutory Sick Pay (SSP): From April, the weekly rate of Statutory Sick Pay (SSP) is £123.25 or 80 per cent of the employee’s average weekly earnings, whichever is lower.
  • Statutory Maternity Pay (SMP) and Statutory Paternity Pay (SPP): These payments are also set to increase to the following rates:
Statutory Maternity Pay (SMP) —
weekly rate for first 6 weeks		 90 per cent of the employee’s average weekly earnings
Statutory Maternity Pay (SMP) —
weekly rate for remaining weeks		 £194.32 or 90 per cent of the employee’s average weekly earnings, whichever is lower
Statutory Paternity Pay (SPP) —
weekly rate		 £194.32 or 90 per cent of the employee’s average weekly earnings, whichever is lower
Statutory Adoption Pay (SAP) —
weekly rate for first 6 weeks		 90 per cent of the employee’s average weekly earnings
Statutory Adoption Pay (SAP) —
weekly rate for remaining weeks		 £194.32 or 90 per cent of the employee’s average weekly earnings, whichever is lower
Statutory Shared Parental Pay (ShPP) — weekly rate £194.32 or 90 per cent of the employee’s average weekly earnings, whichever is lower
Statutory Parental Bereavement Pay (SPBP) — weekly rate £194.32 or 90 per cent of the employee’s average weekly earnings, whichever is lower
Statutory Neonatal Care Pay (SNCP) — weekly rate £194.32 or 90 per cent of the employee’s average weekly earnings, whichever is lower

 

Employers should ensure that these changes are incorporated into their payroll systems, as these payments are linked to the National Living Wage and National Minimum Wage thresholds.

Student loan and postgraduate loan recovery

It is important to ensure that you are also deduct the right amounts for employee’s repayment of student loans, including ensuring that you keep up to date with the payment threshold for each loan plan.

Here are the rates and thresholds for 2026/27:

Rate or threshold 2026/27
Employee earnings threshold for student loan plan 1 £26,900 per year
£2,241.66 per month
£517.30 per week
Employee earnings threshold for student loan plan 2 £29,385 per year
£2,448.75 per month
£565.09 per week
Employee earnings threshold for student loan plan 4 £33,795 per year
£2,816.25 per month
£649.90 per week
Employee earnings threshold for student loan plan 5 £25,000 per year
£2,083.33 per month
£480.76 per week
Student loan deductions 9 per cent
Employee earnings threshold for postgraduate loan £21,000 per year
£1,750 per month
£403.84 per week
Postgraduate loan deductions 6 per cent

 

Preparing for the Changes

It’s essential for businesses to start preparing for the wage increases now. Key steps include:

  1. Reviewing your payroll system to ensure it can handle the updated NMW and NLW rates
  2. Communicating with employees about the pay changes and their implications
  3. Revisiting employee contracts to reflect the updated rates and any statutory changes
  4. Budgeting for the additional employment costs that may come with these increases

Here to help

Employers are encouraged to stay on top of these changes, not just to meet their legal obligations but also to ensure they maintain a competitive and fair pay structure for their employees.

By preparing early for the increase in NMW, NLW and other statutory pay rates, businesses can adapt smoothly and avoid last-minute stress as the new rates come into force.

For more details on the upcoming changes in April 2026 or for further assistance with payroll compliance, speak to our payroll team today.