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.

Start Up Loan Scheme: getting your business off the ground

By Anna Stubbs • January 29, 2026
Having adequate access to adequate funding is fundamental for any startup. In the early stages of getting your enterprise off the ground, you need working capital to reach the all-important minimum viable product (MVP) stage, rent premises and hire staff. But where does this initial funding come from? Let’s look at the UK Government's Start Up Loan scheme and the funding options it offers.

Cost-saving measures and how they drive profits

By Anna Stubbs • January 29, 2026
Question: “Can cost-saving measures in the business truly be a key driver of profits?” Running a profitable business is one of your key goals as an owner. Without profits, there’s no capital to reinvest in the business, no funds to grow the company and no money for your own dividend payment at the end of the financial year. So, is cost-saving the answer in these challenging economic times? Answer: “Careful management of costs is a fundamental way to improve your profit margins and profitability as an enterprise” Cost-saving measures will have a direct and measurable impact on your profits. This is usually achieved via two main mechanisms. Firstly, reducing your variable costs (like raw materials or direct labour) increases your gross profit margin. This retains more revenue from each sale you make as a business. Secondly, lowering fixed overheads (such as rent or software licenses) directly reduces the total expenses on your profit and loss statement, leading to a higher net profit. This immediate bottom-line improvement makes you a more financially healthy prospect to investors and lenders – which, in turn, can often make it easier to access funding and grow the business. Want to know more about cost-saving measures?  Talk to the team about your profit goals and we’ll advise you on the key ways you can reduce your overheads and expenses to drive improved profits.

Protecting you and your business: taking out insurance

By Anna Stubbs • January 29, 2026
We all hope that our pathway along the business journey will be smooth and uncomplicated. But the reality is that accidents can happen, along with unplanned injuries, damaging weather events and legal suits from disgruntled clients. So, what can you do to protect your business from these potential negative consequences? The answer is to take out the relevant business insurance for your company.