Preparing for a living wage for all adults

The government has announced plans to remove the age 18-20 age band from the national minimum wage rates by 2026, meaning workers aged 18 and over will be entitled to the same national living wage as workers age 21 and over. Alongside this, the National Living Wage is projected to rise to £12.71 per hour in April 2026. 

These changes are being positioned as a step towards fairer pay, but for employers, they represent a significant shift in how payroll is structured, particularly for businesses that rely on a younger workforce. So what can employers do now to get ahead of the curve? 

Review your workforce and pay structures 

Start by identifying how many of your current employees are age 18-20 and paid below the National Living Wage rate. If you rely on younger workers – for example, in retail, hospitality or care – you will need to model the impact of the changes on your payroll and profitability. It’s not just about bringing lower wages up; you’ll also need to consider whether other rates across the business will need adjusting to maintain fairness and avoid wage compression. 

Budget for the increase 

The projected rise to £12.71 per hour may seem a long way off, but building this into your financial planning now will help spread the impact. If you already pay above the minimum wage, you might not see a big jump, but if your entry-level pay is close to the legal minimum, the increase could be substantial. 

Review your approach to early careers and training 

Higher wages for younger workers could influence how your business approaches apprenticeships, internships and training-based roles. You may need to reassess how to attract and support early-career talent in a way that remains commercially viable. 

Communicate changes clearly 

As you begin to review pay structures and workforce planning, be sure to communicate openly with your teams. Changes to pay can have a big impact on morale, both positive and negative, so taking the time to explain your approach will go a long way in maintaining trust and transparency. 

Contribute to the consultation 

The Low Pay Commission is currently gathering views on how to implement these changes. This is a real opportunity for employers to share practical insight into how the reforms might affect hiring, training, and costs on the ground. If you want your voice to be heard, now is the time. 

How we can help 

If you’re unsure how these changes might affect your business or want support in reviewing contracts, pay structures or compliance, our employment law solicitors are here to help. We work closely with growing businesses across the UK to make sure their people strategy and legal obligations stay aligned. 

Get in touch with our employment team today for practical, jargon-free advice that helps you stay one step ahead.