UK Labour Market Insights – November 2025 Real Living Wage (RLW) increase The Living Wage Foundation announced new RLW rates for 2025/26: UK-wide - £13.45 per hour (up 6.7%) London - £14.80 per hour (up 6.9%) These voluntary rates reflect the actual cost of living in the UK and apply to all workers aged 18 and over employed by accredited Living Wage employers. Businesses have until 1 May 2026 to implement the new rates, though early adoption is encouraged. Over 16,000 employers are now accredited, covering nearly half a million workers. National Living Wage (NLW) - April 2026 The statutory NLW for workers aged 21+ is projected to rise from £12.21ph (April 2025) to around £12.71ph in April 2026, a 4.1% increase. The Low Pay Commission estimates a range between £12.55ph and £12.86ph, ensuring the NLW remains at least two-thirds of UK median earnings. Final rates will be confirmed in the Autumn Budget. Employment legislation updates: Employment rights bill: Major reforms are progressing through Parliament, including: Day-one rights for unfair dismissal (Commons vs Lords debate continues) Guaranteed hours offers for zero-hours workers Extended tribunal time limits and union balloting changes from 2026 Confidentiality clauses: NDAs and settlement agreements will no longer prevent employees from discussing discrimination or harassment. Immigration: Skills Charge rises 32% on 16 December 2025; stricter English language requirements apply from 8 January 2026. Labour market & recruitment trends: Labour market strained Unemployment rose to 5.0% (July–Sept 2025), the highest we’ve seen since early 2021. Vacancies remain at 723,000, down 12% year-on-year. Wage growth slowed to 4.6%, easing inflation pressures. Recruitment activity Permanent placements continue to decline, while temporary billings rose for the first time in 16 months, reflecting employer preference for flexibility. Candidate availability is at its highest since 2020. Sector insights Engineering and tech roles remain resilient, with demand for electronics design and automation specialists. AI Impact One in six employers plan workforce reductions due to automation, with large firms anticipating cuts of over 10%. What employers should do Budget for wage increases - factor in RLW and NLW changes. Review policies - prepare for Employment Rights Bill reforms and NDA restrictions. Plan workforce strategy - consider flexible hiring and upskilling to address automation risks. References: NLW and NMW – Gov.uk https://www.livingwage.org.uk Estimated NLW 2026 – Personnel Today UK Labour Market info – Gov.uk Hiring Lab – Indeed – Payrolled employment falls KPMG/REC UK Report on Jobs OFS Vacancies & Jobs UK FT.com - AI will lead one in four big UK businesses to cut staffing Labour gov employment law changes Travers Smith employment law update