The national minimum wage is reviewed each year, and the new rate is introduced in April. The new national minimum wage is £12.71 per hour from the 1st of April 2026. These are legally binding minimums. Businesses and employers who pay less than these specified rates will face the risk of fines, back-pay orders, and public naming by the HMRC. For 2026, all categories have seen meaningful increases:
| Worker category | New rate (April 2026) | Previous rate | Increase |
| National Living Wage (21+) | £12.71/hr | £12.21/hr | +50p (4.1%) |
| 18–20 year olds | £10.85/hr | £10.00/hr | +85p (8.5%) |
| 16–17 year olds | £8.00/hr | £7.55/hr | +45p (6.0%) |
| Apprentices (under 19 / first year) | £8.00/hr | £7.55/hr | +45p (6.0%) |
The "National Living Wage" label, which applies to the top tier of the national minimum wage for workers aged 21 and over, was implemented in April 2016. The national minimum wage is set by a government formula, which some people contest, as it’s not calculated against the actual cost of living.
The Real Living Wage, independently calculated and published by the Living Wage Foundation, is currently £13.45 per hour outside London and £14.80 per hour in London. Both of these amounts are comfortably above the new government rate.
The Low Pay Commission (LPC), the independent body that recommends national minimum wage levels, has noted that they expect the April 2026 increase to deliver a real-terms pay increase. This is because the 4.1% national living wage rise is forecast to outpace CPI inflation expected to be 1.8–2.0% over the coming year.
For a single full-time worker on the national living wage (working 35 hours per week), the LPC has estimated a take-home salary increase of roughly 3.3%, or £11.90 per week once tax and National Insurance thresholds are factored in.
The 8.5% increase for 18-20 year olds is the most significant youth rate rise in recent years and continues the government's stated aim of eventually aligning the youth rate with the adult national living wage. The 18-20 rate now sits at 85% of the national living wage, closer to the national living wage than at any point since the earlier years of the national minimum wage.
Many businesses and employers, especially in labour-intensive sectors, now have to face the new rates while facing rising costs, frozen tax thresholds, and sluggish growth. Business groups have flagged that higher wage bills may result in some businesses having to limit hiring, raise their prices, or potentially reconsider scaling plans.
Alex Fenton, group CEO of Legends EOR, has said, "Increasing wages is absolutely the right move. But let's not pretend this is happening in a vacuum. Businesses are already juggling rising costs, stubborn inflation, and slower growth. Add higher wages into the mix, and suddenly those 'nice-to-have' plans, hiring, investment, expansion, start slipping down the priority list, or heading overseas altogether."
Fenton has also called on the government to match its commitment to workers with equal support for business: "If the Government is serious about protecting British jobs, it needs to be just as serious about backing British business."
Lord Richard Harrington, chairman of Make UK, summed up the tension: businesses want to hire and train young people, but the cumulative cost of doing so is a genuine challenge, especially for smaller manufacturers and labour-heavy operators.
The LPC's remit for next year's recommendations has already been published. Based on current wage forecasts, the 2027 national living wage is projected to land in the range of £13.02 to £13.34, with a central estimate of £13.18, a further rise of roughly 2.4-5.0% on the current rate. Those projections remain subject to economic uncertainty, including ongoing developments in global markets.
The government has also restated its intention to eventually extend national living wage eligibility down to age 18, though the LPC has been given full flexibility on the timing, with young people's employment prospects as the guiding factor.
