The calculation is based on an average profit of 13p per pint and reflects the £1.4bn increase in wage costs expected from the national living wage rise confirmed by the Chancellor.
‘Momentary relief’
Access Hospitality managing director Champa Magesh said the Budget offered only “momentary relief” for the sector and warned that many businesses would find it harder to invest, grow or even stay open as cost pressures continue to build.
Magesh said reforms to business rates were welcome and would provide short term cash flow support for many small venues, but argued that the Budget fell short of delivering the wider stimulus the sector needs.
“It is a lost opportunity to spark growth in hospitality,” she said, adding that rising labour costs will now force some operators to make decisions “they will not want to make”.
The Government has introduced permanently lower business rates for the majority of retail, hospitality and leisure properties, with higher charges for high value sites. Magesh said the reform should help slow insolvencies and reduce job losses, but noted that many businesses losing relief next year will still face higher bills overall.
The sector welcomed confirmation that VAT and national insurance rates will not rise, but Access warned that the absence of broader support leaves many operators exposed. Magesh said the current system “punishes businesses for hiring part time staff” and risks further cuts to opening hours or staffing levels.
Income tax and national insurance thresholds will remain frozen until 2030 to 2031. Access analysis suggests the freeze is already influencing consumer behaviour, with DesignMyNight data showing restaurant spend among Gen Z falling by 37% in October compared to last year.
From April 2026, the national living wage for those aged 21 and over will rise to £12.71 an hour. Rates for 18–20-year-olds will rise to £10.85 and to £8 for 16- and 17-year-olds.
Magesh said the uplift is positive for staff but adds significant pressure for operators, particularly those with large part time teams.
Alcohol duty receipts are forecast to increase next year, although no new measures were announced in Parliament. Duty on non-draught products rose with inflation in February, adding further pressure to margins for pubs and bars.
Tourist tax
The Budget also confirmed plans to allow English cities to introduce a tourist tax on overnight stays. Charges of up to £2 per night are expected. Access warned the levy could deter domestic tourism and add another cost for operators in popular visitor destinations.
Magesh said 2026 is shaping up to be “one of the most challenging years yet” for the sector. “Protection and investment are essential to prevent long term damage,” she said.
