UK National Living Wage Increased: What It Means for Millions of Workers

Starting in April, millions of UK workers have seen an important change on their payslips — a rise in the National Living Wage (NLW). The Labour Party government implemented a 4.1% increase, raising the NLW to £12.71 per hour for eligible workers aged 21 and above.

For full-time workers earning the National Living Wage, this increase translates to an additional £900 annually. Meanwhile, younger workers aged 18 to 20 on the National Minimum Wage (NMW) will benefit even more, with a £1,500 yearly pay boost.

Legal experts at Davidson Morris have highlighted key updates employers must address: “From April 2026, companies will need to apply higher statutory payment rates and update payroll, HR systems, and employment documents accordingly. These changes affect statutory sick pay, family-related payments, earnings thresholds, and hourly wage rates, with different implementation timelines in April.” They also caution that these updates could have significant cost and compliance implications, especially for employers with large or variable-hour workforces and those paying close to statutory wage thresholds.

Additionally, the National Living Wage for 18-20-year-olds increased by 8.5% to £10.85 per hour, closing the pay gap with the adult NLW and signaling progress toward the government’s aim to phase out separate wage bands for younger workers.

The National Minimum Wage for 16-17-year-olds and apprentices has also risen by 6%, now standing at £8 per hour.

The government emphasizes that these changes are balanced to support workers while considering business affordability and employment opportunities. As part of its pro-business stance, the government notes measures such as capping Corporation Tax at 25%—the lowest in the G7—reforming business rates, securing trade deals with major partners, and reducing interest rates five times since the election to support businesses across the UK.