5 impacts of the rise in the National Living Wage

Anna Stubbs • January 29, 2026

Budget 2025 announced a forthcoming rise to both the National Living Wage and the National Minimum Wage, with the aim of keeping wages in line with inflation.

But what does a rise in wage rates mean for employers like you?


1. Higher wages for those on the National Living Wage

The National Living Wage (NLW) will rise from 1 April 2026 by 4.1% to £12.71 per hour for eligible workers aged 21 and over. This will increase the gross annual earnings of a full-time worker on the NLW by £900, benefiting around 2.4m low-paid workers.


2. Increased pay for those on the National Minimum Wage

The National Minimum Wage rate for 18–20-year-olds will also increase by 8.5% to £10.85 per hour from 1 April 2026. This will mean an earnings increase of £1,500 p/a for a full-time worker. The NMW for 16–17-year-olds/apprentices will increase by 6% to £8 per hour.


3. Higher labour and operating costs for your business

Where you have workers on the NLW and NMW, this means your payroll costs are going to increase from April 2026. The wage rises will increase your gross payroll, automatically raising Employer National Insurance and workplace pension contributions. This has the potential to put additional pressure on your margins, cash position and net profit as a business.


4. Pressure to boost prices or drop staffing levels

The question is how you react to this increased pressure on your payroll costs. You could offset the higher costs by raising prices, but this risks alienating your existing customers. Or you could cut staff hours and reduce hiring to bring down the overall labour costs you’re incurring.


5. A need to invest in more labour-saving technology

The reality is that human labour costs money. By investing in artificial intelligence (AI), robotic process automation and smart production techniques, some of your basic tasks could be automated. This removes some of your dependency on expensive human labour, but you’ll need to balance the need for human skills and talent against the benefits of automation.


If you’re concerned about the impact of the increase in the NLW and NMW, do come and talk to our team. We can review your staffing, labour costs and profit margins to find a workable strategy for keeping your payroll and hiring costs under control.

5 things your balance sheet can tell you about your finances

By Anna Stubbs • February 25, 2026
Chances are you’ve heard of the accounting term ‘balance sheet’. But what is a balance sheet? And what does it tell you about your finances? Your balance sheet is a financial statement that provides a snapshot of your company’s financial position at a specific point in time. It’s an overview of your finances that details three key elements of your accounting. 

The importance of regular bank reconciliations

By Anna Stubbs • February 25, 2026
A Bank reconciliation involves a comparison of your sales and expense records against the record your bank has. It is a critical financial process to identify and rectify any discrepancies or errors between your internal financial records with the transactions recorded in your bank statement. Bank reconciliations keep your bookkeeping accurate and can help lower your tax, alert you to fraud, and allow you to track costs. They are essential for several reasons: Firstly, they help detect and prevent fraudulent activities or errors, such as unauthorized transactions or bank fees. Secondly, they provide a clear picture of your actual cash position, allowing for better cash flow management and informed financial decision-making. Thirdly, by reconciling regularly, you can also identify any outstanding checks or deposits that haven't cleared, ensuring that you have an up-to-date understanding of your financial health. It can take a lot of time to do it manually, but there is plenty of software to make the process easier. It's important to do it regularly so you recall the correct details. To learn more about how to perform a bank reconciliation and its importance, you can read this guide from Xero. If you need further assistance please talk to us, we can help.

How to improve UK business confidence

By Anna Stubbs • February 25, 2026
“Our data shows more clouds have gathered over business confidence, and the outlook for SMEs in 2026 is unsettled.” “Firms tell us they are worried about tax, struggling to invest and fear they’ll have to put their prices up in the months ahead.” David Bharier, Head of Research at the British Chambers of Commerce