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Minimum wage changes 2026: What do they mean for young people and business owners?
19 February 2026
Accounting & Compliance, Ambitious Startups, Building a Business, Payroll, People, Structuring a Business
The recent Autumn Budget 2025 brought important changes to wage policies that directly affect younger workers:
- From April 2026, the minimum wage for 18–20-year-olds will rise by 8.5% to £10.85 per hour.
- The aim is to narrow the gap between youth minimum wage and the headline adult rate (the National Living Wage), which will rise at the same time to £12.71 for those 21 and over.
- The government has signalled an ambition to eventually abolish the lower youth wage bands, replacing them with a single adult rate for all — though this will depend on future economic conditions.
What this could mean
On the face of it higher pay for young workers helps with cost-of-living pressures, making employment more financially worthwhile and potentially reducing the incentive to remain NEET- not in education, employment or training.
On the other hand from a business perspective the changes for employers are stark- particularly in low-margin or labour-intensive sectors (hospitality, retail, care).
There is no doubt employers will be far more cautious about hiring younger staff, potentially limiting entry-level job availability.
Indeed, we as an accountancy firm will be reviewing our long term strategy for recruitment particularly given the rise in AI.
Many roles previously undertaken by our trainees can now be carried out by new technology and with the rise of wage costs the economic argument for trainees is becoming increasingly difficult.
Whilst the wage increase is good news for those in work the worry is the net effect on youth employment.
Increased cost with the advances of AI and any down turn in the economy could severely impact youth employment.
What Young People Can Do to Improve Their Chances of Employment
With rising wage costs and rapid advances in technology, young people may need to be more proactive and flexible when entering the job market.
The following steps can help improve employability:
Build Skills That Employers Need
Focus on developing practical, in-demand skills, whether through vocational qualifications, apprenticeships, short courses, or certifications.
Alongside technical skills, employers consistently value soft skills such as reliability, communication, teamwork, and adaptability — often gained through part-time work, volunteering, or projects.
Consider Apprenticeships or Targeted Training
Apprenticeships remain one of the most effective routes into work, allowing young people to earn while gaining experience and qualifications.
Where full-time education isn’t appealing, shorter or part-time courses can still significantly improve job prospects without the cost of a degree.
Gain Experience Wherever Possible
Even temporary, part-time, or entry-level roles can make a difference.
Work experience demonstrates commitment, builds confidence, and provides references.
Volunteering, internships, or community projects can also offer valuable transferable skills and help expand professional networks.
Be Open-Minded About Sectors and Locations
Some sectors continue to experience skills shortages, including care, trades, logistics, green energy, and roles requiring hands-on or physical skills.
Many trades in particular face an ageing workforce and offer long-term opportunities.
Being flexible about job roles or location can significantly widen opportunities.
Strengthen Job Search Skills
A clear, well-structured CV tailored to each role is essential.
Networking — through LinkedIn, local groups, training providers, or apprenticeships — often opens doors to roles that aren’t advertised.
Using career services, job centres, and apprenticeship portals can also help identify opportunities.
Stay Informed and Adaptable
Labour market conditions are changing quickly.
Keeping up to date with policy changes, wage trends, and emerging skills can help young people plan ahead.
Long-term employability is increasingly about continuous learning and adaptability, rather than a single career path.
What can employers do?
Technology is moving at a fast pace.
Every industry is being impacted and technology has to be embraced to remain competitive.
Employers will have to continue to introduce more technology and systemize every element of their business.
But good people remain key to so many businesses so don’t give up on employees particularly the young.
Look at apprenticeships and visit Find an apprenticeship – GOV.UK
Remember that pay rates for the first year can start at just £8.00 from April 2026, aligning with the 16-17 age bracket.
Apprentices must be paid for training, and higher rates often apply as experience grows, with many earning above the minimum.
In addition whilst employer national insurance costs are mandatory from 16, a 0% rate applies for employees under 21 and apprentices under 25 on earnings up to the upper secondary threshold (£967 per week).
Final Thoughts
Youth unemployment remains a major issue in the UK — tens or hundreds of thousands of young people are unemployed or “NEET,” and many more are working in low-security or part-time jobs.
Whilst the government’s decision to increase employee costs will be welcome in some quarters young people need to be more open minded to the real opportunities out there as AI moves forwards.
From an employer perspective many businesses are facing an aging workforce and the use of apprenticeship schemes will be key to the success for many businesses.
How we can help you.
Call us on 01634 731390 if you are concerned about the future of your business and need help on:
- Growth strategy for your business.
- Retaining key staff members.
- Using cloud technology to get the most from your business.
- Dealing with the complexities of your payroll.
Our Services
To read more about what we do and who we work with please see our related pages below:
Blogs related to Employees and Growth Strategies
Take a look at our other blogs on the topic of employees and growth strategies:
Why Employees Really Stay at a Firm: Insights from Leading Thinkers
EMI Scheme Expansion in 2026: A Big Opportunity for Scale-Ups
The content in this blog is correct as of 18th February 2026. See terms and conditions.
