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The National Living Wage is changing in 2026, and for employers in finance and accountancy, that will have a very practical impact on your salary structures, your hiring plans and even your team design.
When the National Living Wage rises in April 2026 to a level where a full-time role will equate to somewhere around £24,784.50, the lower end of the finance salary market is highly likely to change right across the board. Salaries and the expectations of candidates and existing employees will undoubtedly rise, especially in junior and transactional finance positions.
When Minimum Wage Moves, Everything Near It Moves Too
As you will know, the minimum wage (the legal minimum hourly rate for most workers) and the National Living Wage (the higher minimum for workers above a certain age) are set by the government based on recommendations from the Low Pay Commission and wider economic data.
What tends to happen when minimum wage climbs is that it doesn’t just affect the very lowest-paid roles. It creates a “wage compression” scenario. Once the pay levels at the bottom start bunching up, and salaries just above the minimum are forced to rise to maintain some kind of common sense hierarchy of salaries.
In practice, that usually means:
- Roles that used to sit just above minimum wage now look too close to the legal baseline.
- Employees in those roles understandably expect an uplift to reflect their skills and experience.
- New candidates entering the market set their expectations based on the new minimum, not the old one.
- The minimum wage is now the baseline and that means you may need to look beyond it to get the right people.
Shifting Expectations in Junior and New Roles
There can be a significant impact on expectations as well as the bottom line costs when there is a shift in starting level salaries.
Let’s take an example.
If you previously hired an invoice clerk (or similar junior ledger role) at £25,000, that was clearly above minimum wage. With a new minimum equivalent of £24,784.50, that gap has almost disappeared. Realistically, the market will now expect something closer to £27,000 to £28,000 for the same role.
That has several knock-on effects:
- Unrealistic hiring expectations
Some employers still try to recruit a junior with experience at (or barely above) minimum wage. Candidates with even modest experience will know what the market is paying now. Offering minimum wage while expecting prior ledger or system experience almost instantly becomes unrealistic and leads to unfulfilled roles. Even if you do manage to find someone you are starting a new employee who is already seeing better offers elsewhere and that is far from an ideal situation when it comes to retention. - Pressure on the rest of the finance team
There is clear evidence that salary transparency tends to increase expectations in other employees. So, if a new starter in a junior role comes in on known salary level, it is in the public domain of the workplace. That naturally has a compound effect on expectations across roles such as, assistants, ledger clerks, and even assistant accountants, who expect their own salaries to move in line. - Internal equity challenges
If you adjust starting salaries but not existing ones, you risk creating internal pay inequalities. That can impact morale and retention. This is especially true in close-knit finance teams where people share personal information on a social basis.
The Cost Questions About Who Does the Work
Like any business, finance departments are under pressure to perform and provide value for money. That’s not an unreasonable expectation, so one of the knock-on effects of a wage compression situation can be the questions that start to be asked.
- Can technology do part of this job?
Automated invoice scanning, basic artificial intelligence (AI) tools and accounts payable (AP) automation can reduce manual input. While these tools don’t replace finance teams entirely, they can change the shape and size of them. - Should we build the team differently?
Some employers are now choosing to hire fewer people in the £25k–£30k bracket and focus instead on recruiting at £30k–£40k, where they can secure candidates who potentially add more value.
Fewer junior placements at £25k–£30k, and a concentration of hiring between £30k–£40k and increased technology are tempting as short term responses to a minimum wage rise, but they could be building a problem with internal development for the future. For now, it seems to provide value, but soon it could result in a scramble for higher value employees and reduced employer loyalty.
So, what are the options for the employer when they find themselves in a wage compression scenario? Well, they will often try to benchmark through data such as salary surveys, but they are not always as useful as they initially seem.
How Useful Are Salary Surveys?
Don’t misunderstand me here, I am not saying that there isn’t a place for salary surveys or that they don’t provide some useful information. They do; it’s just not necessarily the best information to act on. In fact, without context, they can be misleading. They have limitations that can be dangerous, particularly when there is a sudden change.
Typical bandings might say, for example:
- £25,000–£30,000 – Ledger Clerk / Credit Controller
- £30,000–£40,000 – Assistant Accountant
- £40,000–£60,000 – Finance Manager
These ranges may look neat, but they don’t always reflect reality because:
- They’re usually based on historical data and may lag behind rapid changes such as minimum wage increases.
- They rarely account for regional differences, company size, sector, or whether a role is hybrid, fully office-based or fully remote.
- They treat job titles as if they’re uniform, when the actual scope of the role varies hugely. One “assistant accountant” might be doing high-volume posting; another might be supporting with budgeting, cash flow forecasting and management accounts.
Every recruitment specialist will tell you that salaries are simply not that easy to pin down. To start with, there are many other factors such as development opportunities and benefits in the mix. It’s a known phenomenon that pay is not everything. Research from organisations such as the Chartered Institute of Personnel and Development (CIPD) and the Office for National Statistics (ONS) shows that pay is also influenced by multiple factors. Skills shortages, location, sector and flexibility are just a few examples of why the salary cannot safely be just based on job titles.
At the end of the day, it’s best to treat salary surveys as a starting point; they are not a definitive answer.
Ask a Specialist, and You Will Get a Specialist Answer!
When salaries are key, talking to a specialist accountancy and finance recruiter is more useful than ever.
A good recruiter can:
- Give you a real-time view of what candidates are actually accepting for similar roles in your area.
- Help you distinguish between a true entry-level role (where minimum wage might be appropriate) and a role that really requires experience or qualifications, which justifies a higher salary.
- Work with you to reshape a role if your budget is tight, for example, stripping back responsibilities or planning a structured development path to attract someone at a lower level now, who can grow with the business.
Most importantly, a recruiter can talk through the specifics of your vacancy:
- What systems and what range of knowledge is needed to use them
- Reporting lines and exposure to senior stakeholders
- Transaction volumes and complexity
- Study support and progression opportunities
- Hybrid working, flexibility and benefits
By combining these details with current market data, you’ll get a far more accurate, specific, local and up to date salary benchmark than any static survey can provide.
The increase in minimum wage is not just a legal change, it is potentially a structural one as well. It pushes up wages near the bottom, changes candidate expectations and means employers may need to rethink how they design and pay their finance teams.
In this context, relying solely on generalisations like salary surveys or going with your existing idea of what salaries should be is a risky approach. Here at AFR, we are grounded in the live market and the reality of specific roles. We can give you a far clearer picture of what you should be paying, and how to attract the right person without under (or, of course, over) paying.