From April 2026, the UK government has indicated that it wants to move to a single adult minimum wage rate, thereby eliminating age-based minimum wage bands. This means that every worker aged 18 and over would receive the same national living wage. This bold move would be a milestone for pay equality, but it also represents a significant operational and financial shift for many businesses.
The Low Pay Commission (LPC) has been tasked with consulting widely and recommending how to deliver the single adult rate in a way that balances fair pay with business affordability. Early estimates suggest the 2026 national living wage would be around £12.71 an hour. While many employers already pay above this level, others, particularly those with younger workforces in retail, hospitality and care, would face significantly higher wage bills and may need to rethink workforce structures, apprenticeships and entry-level roles.
A single living wage will simplify pay systems and send a strong message of fairness to younger employees, potentially boosting morale and retention. At the same time, increased wage costs could squeeze margins, especially for smaller employers, expose internal pay gaps and prompt tough decisions around recruitment and training investment. Employers may also need to review pay differentials further up the ladder to avoid compression, which could lead to dissatisfaction among more experienced staff.
The impact will not be the same for every employer. Because the single rate will apply nationwide, organisations in lower-cost regions may feel the increase more keenly. This could shape decisions on recruitment and pay benchmarking across different locations. Modelling these impacts early will help avoid surprises and give employers confidence that they can manage the transition smoothly.
The LPC is due to report its final recommendations this month. If the move to a single adult minimum wage rate goes ahead, preparation for employers will be key. Employers will need to review contracts, staff policies and payroll systems to remove references to age-based rates and ensure a smooth transition. Unionised workplaces will need time to negotiate changes to collective agreements, and open communication with staff will help manage expectations and maintain trust. With a single adult rate, HM Revenue and Customs (HMRC) will find it simpler to detect underpayments, so payroll accuracy will be critical to avoid enforcement action or reputational risk.
The LPC consultation is also an opportunity for employers to shape the outcome. Sharing real-world data on costs and workforce impacts can help create a balanced approach, one that delivers fair pay without putting businesses at risk.
April 2026 may feel a long way off, but acting early gives organisations the breathing space to plan, budget and turn what might feel like a compliance challenge into an opportunity to strengthen culture, trust and long-term resilience.
Claire Cole is a senior employment solicitor employment at Harper James
