Business & Technology
Minimum Wage to rise on April 1 2026 – what it means for you
The National Living Wage will rise by 4.1% to £12.71 an hour for eligible workers aged 21 and over, which the Government said will increase gross annual earnings of a full-time worker on the rate by £900, benefiting around 2.4 million low-paid workers.
That will mean for the lowest paid workers on a 40-hour-week contract their pre-tax pay will hit £26,436.80 for the first time. A 37.5 hour week will see a salary of £24,784.50, while 35 hours will pay £23,132.20 a year.
The National Minimum Wage rate for 18 to 20-year-olds will increase by 8.5% to £10.85 an hour, narrowing the gap with the National Living Wage.
This will mean an annual earnings increase of £1,500 for a full-time worker, which the Government said marks further progress towards its goal of phasing out 18 to 20 wage bands and establishing a single adult rate.
The National Minimum Wage for 16 to 17-year-olds and those on apprenticeships will increase by 6% to £8 an hour.
Chancellor Rachel Reeves said she had accepted recommendations from the Low Pay Commission so that those on low incomes are “properly rewarded” for their work.
The Chancellor said: “I know that the cost of living is still the number one issue for working people and that the economy isn’t working well enough for those on the lowest incomes.
“Too many people are still struggling to make ends meet, and that has to change.
“That’s why today I’m announcing that we will raise the National Living Wage and also the National Minimum Wage, so that those on low incomes are properly rewarded for their hard work.
“These changes are going to benefit many young people across our country, getting their first job.”
What does the minimum wage increase mean for small businesses?
Kate Underwood, Managing Director and HR Director at Southampton-based Kate Underwood HR and Training says: “It’s good news for workers who’ve been stuck on the lowest rung for too long. £12.71 an hour still won’t stretch far in today’s world, but it’s a start. And closing the gap for younger workers? About time.
“Will it be tough for small businesses? Yep. But so is constant staff turnover, sick days from burnout, and people juggling three jobs just to pay the bills.
“Can the UK afford it? Wrong question. Can we afford not to pay people properly? That’s the real one.”
Prem Raja, head of Trading Floor at Currencies 4 You agrees that it’s good news for workers.
“They need the extra cash and hopefully they spend it locally,” he says. “But we have to be real about the pressure this puts on business owners. It is getting incredibly hard to run a company right now. We’re already dealing with rising National Insurance and a weak Pound. Adding a big wage hike on top, especially that huge jump for younger staff, is squeezing us from every side.
“The brutal truth is that if employing people becomes too expensive, businesses just won’t hire. We’ll see jobs disappear because owners simply can’t afford the payroll, or prices will have to go up, which just fuels inflation further.
“It looks like they want to land some ‘good news’ before the Chancellor likely announces heavy tax burdens tomorrow. Without real help for small businesses, this could be the tipping point that forces many entrepreneurs to shut down.”
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But Riz Malik, director at Southend-on-Sea-based R3 Wealth also has concerns: “The last budget impacted employers view on employment by adding further costs.
“Raising the national living wage will only add to it if you factor in this and the associated employment costs. This is on the eve of the budget, which is likely to make it even more costly to do business in the UK.”
The increases will benefit a total of 2.7 million young and older workers, said the Government, adding that by seeking expert and independent advice, it was able to ensure that the right balance is struck between the needs of workers, the affordability for businesses and the opportunities for employment.
The Original Factory Shop which sells discounted homewares, furniture, electrical goods and toys, shut its store in Carterton yesterday (Saturday, March 28).
On the business’ Facebook page, last-minute discounts were being offered with clothing down to £2 an item.
READ MORE: Store closure fears as UK discount brand in administration
On Thursday, March 26, a spokesperson for the store said: “Everything in store is now up to 85 per cent off as we prepare to close our doors this weekend.
“This is your last chance to grab a bargain – once it’s gone, it’s gone.”
Following that announcement, prices were subsequently lowered and lowered.
Other branches around the UK also shut yesterday including in Cromer, Gorleston and Bungay in Norfolk and Suffolk with major sales also being implemented at other locations.
This comes after the business fell into administration in January, with further closures also expected imminently in Snettisham, according to The Sun, and around the country.
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Administrators said The Original Factory Shop’s troubles have been driven by challenging trading conditions, linked to high-cost inflation, fragile consumer confidence and rising labour costs caused by government policies.
Problems were then exacerbated by issues linked to its third-party warehouse and logistics operator, weakening sales further.
It only has one store in Oxfordshire, its Carterton shop, although Claire’s – which is also owned by investment firm Modella Capital and is in administration – has one in the Oxford Westgate shopping centre.
The fashion retailer this month closed down its store in the Oxford city centre shopping centre having opened in October 2017 as part of the £440m revamp.
It was one of the original retailers as part of the shopping centre’s new phase of life, along with John Lewis, Primark and Next.
A spokeswoman from Hugo Boss said: “Hugo Boss optimises its global store portfolio as part of its long-term strategy, which also affects the Boss Oxford Westgate Centre store.
“Hugo Boss will maintain a strong presence in the UK, and we will also continue to serve our customers via our online flagship store at hugoboss.com.”
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The company did not say whether any redundancies had been made from closing the store.
The spokeswoman said: “Wherever possible, we reallocate employees through transfers or other internal opportunities.”
There are indeed other branches not too far, including at Bicester Village, Swindon and Reading.
A spokeswoman for the Westgate said: “We remain committed to making Westgate Oxford a vibrant and varied retail destination for our guests, welcoming exciting new arrivals such as Sephora, The Beefy Boys, and the opening of Lego later this spring, as well as recently upsized stores for Oliver Bonas, Goldsmiths, and Superdrug.
“We look forward to sharing more details about new brands joining the centre soon.”
Henley Business Buzz hosted its first event at Henley Rugby Club, drawing more than 30 businesses and decision-makers from the local area.
The group is part of the wider Business Buzz network, offering informal, no-membership, pay-as-you-go networking that focuses on building professional relationships in a relaxed setting.
Orinta Gaucyte, host of Henley Business Buzz, said: “It was fantastic to see so many local businesses come together for our first Henley Buzz.
“There’s something really special about building a supportive community where people feel comfortable, included and able to make genuine connections.
“A huge thank you to everyone who came along and helped make the launch such a success.”
The launch was attended by Business Buzz co-founders Katrina Sargent and Simon George, who officially opened the event.
The Henley meetings are supported by sponsors Logic Financial Services and Logic Mortgages.
Lee Humphrey, of Logic Financial Services, said: “It’s brilliant to see an event like Business Buzz arrive in Henley.
“Creating opportunities for local businesses to connect in a relaxed and approachable way is incredibly valuable for the town, and we’re proud to support something that brings the business community closer together.”
Henley Business Buzz will take place on the fourth Thursday of each month, with the next event scheduled for Thursday, April 23.
All businesses, entrepreneurs, and professionals in the area are welcome to attend.
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