06/08/2025
The government may need to increase the national living wage (NLW) from the current £12.21 to £12.71 in April 2026 to meet its own targets on salary increases, the Low Pay Commission (LPC) has said.
Neil Leitch, CEO of the Early Years Alliance, commented: “While we fully support efforts to ensure that all workers receive a fair and reasonable wage, the reality is that, despite a lower recommended wage uplift than in previous years, without an adequate increase in government funding, any increase in the national living and minimum wages is still likely to put financial pressure on early years providers across the country.
“Over recent years, early years funding has simply not kept pace with the rising National Living Wage – particularly the need to maintain appropriate wage differentials between more junior and more senior early years roles. As a result, we have seen the cost of private hours continue to rise for parents, while more and more settings have struggled to keep their doors open.
“With government funding set to account for 80% of setting income once the expansion of the early entitlement offer is fully rolled out next month, ensuring that government funding covers rising delivering costs has never been more critical.
“As such, as ministers consider the Low Pay Commission’s recommendations, we urge them not to overlook the need to ensure that early years funding rises in line with whatever level of wage increase is ultimately put into place. Given our sector’s central role in giving children the best start in life and breaking down barriers to opportunity, failure to do so is surely not an option.”
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