Proposed 2026–27 Statutory Pay Rates: what Employers need to know

The government has now released the proposed statutory payment rates for the 2026–27 financial year, outlining key changes that will affect employers and employees across the UK. These updates cover family-related leave which includes maternity, paternity, adoption, shared parental, neonatal and bereavement leave as well as statutory sick pay (SSP).

At Hello People Solutions, we here to help employers stay ahead of regulatory changes. So here’s a clear breakdown of what these updates mean and how you can prepare before the new rates go live in April 2026.

Increases to statutory family related pay

From April 2026, statutory maternity, paternity, adoption and shared parental pay are all set to rise from £187.18 to £194.32 per week

This 3.8% increase mirrors the Consumer Prices Index (CPI) rate of inflation for the year to September 2025, as announced by Work and Pensions Secretary Pat McFadden.

In addition to the core family-related entitlements, the following payments will also rise to £194.32 per week:

• Statutory Neonatal Care Pay

• Statutory Parental Bereavement Pay

These increases ensure that families taking time away from work during some of life’s most significant and often challenging moments receive financial support that keeps pace with inflation.

Statutory Sick Pay (SSP) is also increasing

Statutory sick pay will also rise in April 2026, moving from £118.75 to £123.25 per week

While this increase aligns with inflation, the most significant change to SSP is not the rate itself but reforms set out in the Employment Rights Bill.

Lower Earnings Limit set to increase but with a twist

The Lower Earnings Limit (LEL) required to qualify for both family-related payments and SSP will rise from £125 to £129 per week.

However, under the Employment Rights Bill, the government intends to scrap the LEL for SSP entirely, meaning more employees, including those in insecure, part-time or low-paid roles, will be eligible for sick pay. This change is part of a broader effort to expand employee protections and reduce the financial pressure on those facing ill health.

Sick Pay from day one: a major shift for Employers

One of the most impactful reforms expected to come into force from April 2026 is the removal of SSP waiting days. Currently, employees only qualify for SSP from the fourth day of absence. Under the new rules, SSP will be payable from day one.

Following the government’s U-turn on proposals related to day-one unfair dismissal rights, the Employment Rights Bill is now more likely to secure Royal Assent in the coming weeks—paving the way for these SSP reforms to become law.

For employers, this shift means:

• Earlier financial responsibility when employees become unwell

• Potential increases in absence-related costs

• The need to review sickness absence processes, policy wording and payroll systems

What this all means for Employers

These statutory updates highlight the importance of keeping your HR policies compliant and your workforce well-informed.

Between increases to statutory rates, eligibility changes, and more generous SSP rules on the horizon, businesses should be asking:

• Are our payroll systems ready for the updated rates?

• Do our employee handbooks reflect the April 2026 changes?

• Are managers trained on the new SSP rules?

• Will our current absence management processes still work effectively when SSP becomes payable from day one?

How Hello People Solutions can support you

At Hello People Solutions, we help SMEs navigate shifting employment legislation with confidence.

Whether you need:

• Updated HR policies

• Manager training

• Payroll guidance and/or management

• Advice on managing sickness absence fairly and effectively

• Support preparing for the new Employment Rights Bill requirements

  
  

…we’re here to help you stay compliant and people-focused.

Being proactive now helps avoid compliance issues and ensures employees feel supported and valued.