Potential minimum wage rise to £12.71 sparks concern

The UK’s National Minimum Wage could rise by 4 percent in April 2026, according to new analysis from the Low Pay Commission (LPC).

If implemented, the main adult rate, currently £12.21 per hour, would increase by 50 pence to £12.71 in line with the Government’s ambition to set minimum pay at two-thirds of median earnings.

The LPC has indicated that the final figure could be even higher, potentially reaching £12.86, depending on wider economic conditions. These recommendations will be finalised in October, but the Government will make the ultimate decision on rates to take effect the following April.

This potential increase comes at a time when hospitality businesses are already grappling with rising overheads. Earlier this year, the minimum wage increased by 6.7 percent, and employers also saw higher national insurance contributions come into force, creating a dual cost burden for operators across Northern Ireland and the UK.

UKHospitality chief executive Kate Nicholls has urged the LPC to weigh the wider economic landscape when forming its final recommendations.

“With significant new costs, such as the increase made to employer national insurance contributions, already hitting businesses hard, any significant wage hike may cost jobs,” said Nicholls.

“We urge the Low Pay Commission to recognise these cost pressures and recommend a more gradual and sustainable increase this year.

“Regrettably, escalating employment costs are already forcing businesses to reduce staff hours and, in some cases, make redundancies. Across the board, the labour market indicators are flashing red, and the Bank of England has also repeatedly voiced concerns about a potential wage-price spiral fuelling inflation. Inflating wages too far, too fast, would be counter-productive, resulting in fewer people earning a little more, but many more facing job losses or reduced hours, and ultimately undermining the goal of putting more money in people’s pockets.”

In a further potential shake-up to pay structures, the Government is exploring the removal of separate age bands for minimum wage rates. It has asked the LPC to consult on narrowing the gap between the rate for 18 to 20-year-olds, currently £10 per hour, and the rate for workers aged 21 and over.

This move is part of a broader effort to introduce a single adult rate, with ministers branding the current tiered system as discriminatory.

As the industry continues to face intense cost pressures, all eyes will be on the LPC’s final report this autumn. Operators are being encouraged to prepare for multiple scenarios ahead of 2026, particularly given the continued volatility in wage-setting and labour market trends.