Increases to the National Minimum Wage, extending parental pay to self-employed fathers and...
Budget 2026
Increases to the National Minimum Wage, extending parental pay to self-employed fathers and partners, and higher tax-free mileage rates headline the 2026 Budget as it pertains to HR.
National Minimum/Living Wage
The National Living Wage and the National Minimum Wage rates will increase from 1st April 2027 as follows:
- 21-year-olds and over (National Living Wage) – from £12.71 to £13.21 per hour
- 18–20-year-olds – from £10.85 to £11.27 per hour
- 16–17-year-olds and apprentices – from £8.00 to £8.31 per hour
- Accommodation offset – from £11.10 to £11.53
Approved mileage allowances
Ahead of the Budget, the Chancellor announced that higher tax-free Approved Mileage Allowance Payments (AMAP) rates, which took effect from 6 April 2026, will be made ‘permanent’.
Under the changes, the AMAP rate of 55p per mile for the first 10,000 business miles travelled each year will be maintained permanently. In addition, the rate paid for business mileage above 10,000 miles will increase from 25p to 35p per mile. This is expected to be effective from 6 April 2027.
Parental pay
Again, announced ahead of the Budget, from April 2029, eligible self-employed fathers, partners and adopters in Great Britain, who are currently excluded from the system, will be able to access parental pay. This comes in advance of the ongoing Parental Leave and Pay Review, which will conclude in early 2027.
Non-compete clauses
The Budget confirmed the government’s intention to introduce legislation so that non-compete clauses in employment contracts ‘do not prevent startups and scaling firms from hiring, or workers in the everyday economy from moving jobs’. The government will set out a detailed position on all these issues in early 2027.