Millions of UK workers will get a pay boost in 2026 due to a rise in the National Living Wage. Starting in April, full-time workers aged 21 and older will earn £12.71 per hour, up from £12.21. This could mean about £975 more each year for many, helping with rising living costs.
This change aims to help low-income workers throughout the UK. For those in retail, hospitality, care work, or other hourly jobs, this increase may provide needed extra money in your monthly budget.
The minimum wage increase in April matters for workers, families, and small businesses. At Clarkwell & Co. Chartered Certified Accountants in Central London, we understand the importance of knowing what this means for your income, payroll duties, and financial plans. Many of our clients in North London and across the UK are already preparing for these changes.
We will clarify who qualifies for the raise, who doesn’t, and how this change might affect your income or business, offering insights for employees, employers, and the self-employed.
The Numbers Explained: New Minimum Wage Rates for 2026
The National Minimum Wage changes in 2026 affect all age groups. The government is raising the minimum wage for all workers to match the economy, cost of living, and inflation. Here’s a summary of the new UK wage rates for April:
| Age Group | 2025 Rate (£/hour) | 2026 Rate (£/hour) |
| 21 and over (Living Wage) | £12.21 | £12.71 |
| 18 to 20 years old | £10.00 | £10.50 |
| Under 18 | £7.55 | £8.00 |
| Apprentices* | £7.55 | £8.00 |
Note: The apprentice minimum wage in 2026 applies only to apprentices under 19 or those over 19 in their first year.
For workers earning the National Living Wage in 2026, the increase adds about £81 per month (based on a 37.5-hour week). This money can help with groceries, transportation, or energy bills. Over time, these small increases contribute to financial stability.
This wage increase is part of a government plan to raise the National Minimum and Living Wages to better match inflation and average earnings. It recognises that wages have not kept up with living costs and that changes are necessary to help people move up economically.
Who Qualifies for the £975 Wage Boost?
If you want to know who can get the £975 wage boost, it mostly depends on your age, job, and work status. The government aims to help as many workers as possible earn fair pay.
You are eligible if you:
- Are aged 21 or over and earn the National Living Wage.
- Are working full-time (35-40 hours/week).
- Are an employee (not self-employed or freelance).
- Work legally in the UK.
Agency workers, part-time staff, and zero-hours contract employees are eligible for the new minimum wage if their jobs qualify as employment. Part-time workers will see an increase based on their hours. For instance, a retail employee working 20 hours a week can expect to earn about £480 more per year. This is a good time for those in minimum wage jobs in hospitality, retail, transport, or care to check their payslips.
If you’re a business owner, especially in food or delivery services, prepare for this change now. We assist businesses across the UK with wage forecasting and cash flow management through our tailored services. Our advice helps you stay compliant while protecting your profits.
Who Doesn’t Qualify for the Pay Rise?
Not everyone qualifies for this pay boost. Knowing who doesn’t qualify in the UK can help prevent confusion and set clear expectations for workers and employers. Though the law is straightforward, misunderstandings can lead to disputes or HR problems.
You are not eligible if you are:
- Self-employed, running your own business (check our VAT Return Services London to ensure you’re still compliant).
- On unpaid work experience or shadowing others at work.
- On a government pre-apprenticeship scheme or internship.
- Volunteering or working for a charity.
- Under school-leaving age (usually under 16).
- A company director is not under an employment contract.
- Living and working within a religious community where standard employment contracts don’t apply.
Many gig workers, freelancers, and unpaid interns do not earn at least minimum wage. This is a big problem, especially for those with unstable jobs and no benefits or sick pay. If you’re in one of these groups, consider getting advice from a professional, like us at Clarkwell & Co. We can help you understand minimum wage rules for self-employed workers in the UK, as your tax classification may be outdated or wrong.
Part-Time and Apprentices: What Can You Expect?
If you’re balancing work and studies or starting an apprenticeship, there’s good news. The new wage policy in the UK ensures that all eligible workers get a pay raise, no matter their hours.
Part-time workers may not reach the full £975 a year, but they will earn more per hour. For instance, a person working 20 hours a week can expect an annual increase of about £480. This extra pay offers more flexibility and savings, especially for students or caregivers managing multiple responsibilities.
Apprentices under 19 or in their first year will now earn £8 per hour, matching the rate for those under 18. This change benefits young workers gaining experience. Additionally, apprentices over 19 who have completed their first year are entitled to the full minimum wage for their age, which can be up to £12.71.
Employers need to be aware of compliance, as mistakes can lead to penalties. If you run a training or apprenticeship program, consider consulting with our payroll and tax planning experts at Clarkwell & Co.
How Employers Should Prepare for the Change
From a business point of view, the UK minimum wage increase in April could raise costs, particularly for businesses that rely on a lot of workers. If you own a coffee shop, delivery service, or logistics company, higher hourly pay can affect your profits.
Employers must:
- Update payroll systems in time for April.
- Reassess budgets and operating costs.
- Communicate clearly with staff.
- Ensure employment contracts reflect the new rates.
- Review all contractor and freelancer agreements for minimum wage compliance risks.
Professional support is essential here. At Clarkwell & Co., our accountants in Central London assist small and medium-sized businesses with wage compliance, PAYE, and tax predictions. We help you stay on track while keeping your business efficient.
We offer complete support for employment benefits, pension plans, and HMRC submissions. This helps your business stay compliant and competitive in the job market.
Economic Context: Why This Raise Matters Now
Many households are reevaluating their budgets due to the rising cost of living. Higher food prices, energy bills, and housing costs are straining low to middle-income families. The £975 pay rise for full-time workers in the UK in 2026 will help cover some of these costs.
However, the minimum wage often does not match the real living wage needed to live comfortably, especially in cities like London. Although the legal minimum has improved, there’s still a gap between what people need and what they earn.
We frequently talk about this with clients who need Capital Gains Tax Service in London. Changes in personal income can affect capital allowances and tax efficiency. As wages increase, more employees may move into higher tax brackets, making it important to review tax planning strategies. We offer smart, personalised advice to help.
What the DWP Minimum Wage Update Means for You
The DWP minimum wage updates mean more than just small changes to pay. They show a national movement toward better worker rights and financial stability. The Department for Work and Pensions stresses that fair wages are crucial for a strong economy and reducing reliance on benefits.
Employees should check their contracts to make sure they are paid fairly. Employers need to ensure their payroll systems meet legal requirements. Errors can lead to fines, legal claims, and damage to their reputation.
Our Trusted Accountants in North London are here to help businesses with legal compliance and payroll planning. We provide audits, training, and reviews to prepare you for the April deadline without last-minute stress.
Young Workers and the Road Ahead
The increase in wages for young workers in the UK shows that younger employees share many living costs with older workers. While these rates are still below the National Living Wage, the rise is a good sign.
Young people aged 18 to 20 will earn £10.50 per hour, while those under 18 and eligible apprentices will receive £8.00. This gives students and part-time workers a chance to save, invest, or help with household expenses.
These higher wages might also motivate more young people to join the workforce and gain experience sooner. With better pay, they can start building credit, setting up pensions, or funding further education, leading to improved futures.
What Should You Do Now? Actionable Steps for Employees & Employers
If You’re an Employee:
- Review your contract and payslips.
- Compare your rate with the £12.71 hourly rate UK.
- Speak to your HR or payroll team if you’re not receiving the correct amount.
- Consult a trusted accountant if you suspect errors.
- Evaluate how the extra income affects your tax or benefits.
If You’re an Employer:
- Audit all current payroll rates.
- Notify eligible staff in writing.
- Update your systems and budgets accordingly.
- Work with professionals like Clarkwell & Co. to avoid any HMRC issues.
- Review employment contracts and ensure documentation is up to date.
- Consider how pay rises may affect holiday pay, pensions, and bonuses.
Being proactive makes transitions easier and avoids legal problems. Every year, we help hundreds of UK businesses prepare for regulatory changes.
A Step Forward, but More to Do
The recent pay rise for UK workers is good news, especially for full-time employees in low-paying jobs. However, it still falls short for many. The gap between the minimum wage and what people need to live comfortably is persistent, particularly for self-employed and gig workers.
We need to keep talking about fair pay for all workers, no matter how they are employed. Key areas to address include tax incentives, benefits reform, and clearer definitions of contractors versus employees.
At Clarkwell & Co. Chartered Certified Accountants, we help employees and businesses understand how pay changes impact personal taxes and business plans. If you need help with payroll, tax strategy, or business growth, please reach out.
Let’s make sure you’re ready for April and beyond.
