The Federation of Independent Retailers (The Fed) has reacted to a reported increase in the National Living Wage, though the rate of increase is slightly slower than in recent years.
The minimum wage for UK workers aged 21 and over is expected to rise by 3.9%, from £12.71 to £13.20 an hour from April 2027. The increase is expected to be confirmed by the chancellor in today's Budget. For those aged 18–21, the minimum wage is expected to rise by a similar 3.9%, from £10.85 to £11.27 an hour.
Slower rise than recent years
This is a lower increase than the 16.3% and 8.5% rises for younger workers that took effect in April 2025 and April 2026 respectively. The expected increases come at a time when the Office for National Statistics (ONS) records inflation at approximately 3.5% in the year to September.
Independent retailers are major employers, but the Fed has repeatedly raised concerns that sharp increases in the minimum wage, combined with higher National Insurance Contributions and other rising operating costs, are making it increasingly difficult for independent businesses to recruit and retain staff.
Fed president warns of cumulative costs
Hemanshu Patel, national president of the Fed, said: “Independent retailers want to pay their staff fairly, but the Government must recognise that every increase in employment costs has to be paid for by a business already facing significant financial pressures.
“For many independent retailers, these are not simply figures on a spreadsheet. They affect decisions about whether they can afford to take on new staff, offer hours to younger workers or maintain their existing workforce.
“We are concerned that, without proper consideration of the cumulative costs facing employers, the government risks making it harder for young people to find work and for independent retailers to continue providing jobs in their local communities.
“We want to see fair pay, but we also need a sustainable environment in which independent retailers can employ people, invest in their businesses and continue serving their communities.”
