- Discriminatory age bands to be removed as new Low Pay Commission remit delivers progress towards a single wage rate for adults.
- Government places cost of living at the heart of the remit a year on from its first inclusion, meaning more money is being put into the pockets of hardworking people – delivering the Plan for Change.
- Low Pay Commission to continue longstanding approach of assessing the impact of wage reforms on different sectors, ensuring recommendations support both economic growth and fair pay.
The Government’s manifesto commitment to deliver a genuine living wage for working people took a step closer today (5 August) as it set out new considerations for the Low Pay Commission (LPC) when recommending next year’s National Living Wage and National Minimum Wage.
Around 3 million workers benefitted from last year’s decision to include the cost of living in the LPC’s remit for the first time. This led to a record cash increase in the Minimum Wage for apprentices and those under 18, and a £1,400 annual boost for full-time workers on the National Living Wage from April.
Higher wages for the lowest-paid workers not only provide greater financial security for families but also mean more money in the pockets of working people to spend on the things they need – supporting businesses and driving economic growth across the country as part of the Plan for Change.
With younger workers being held back by discriminatory age bands, the updated LPC remit will drive forward the Government’s commitment to delivering a single adult pay band.
The LPC will consult with employers, trade unions and workers on narrowing the gap between the 18–20-year-old rate of the National Minimum Wage and the National Living Wage and will put forward recommendations on achieving a single adult rate in the years ahead.
The remit will also ensure that the LPC continues to actively consider the cost of living in its recommendations for National Living Wage rates to apply from April 2026.
Business Secretary Jonathan Reynolds said:
Low pay drags down living standards for our workers and in turn hurts our high streets and local businesses.
This Government’s Plan for Change will put money back in people’s pockets, with this new remit marking the next step in considering how we ensure a fair deal for our lowest paid workers while maintaining a competitive economy that boosts businesses and their employees alike.
Deputy Prime Minister Angela Rayner said:
We promised to make low pay a thing of the past, and deliver a wage people can live on, and that is exactly what this government is determined to deliver.
We have already taken bold action to Make Work Pay with more than 3 million workers seeing a huge boost in their pay following our increase to National Minimum and Living Wage.
This remit is the next milestone in our plan to get more money in working people’s pockets, raise living standards in every part of the UK, and get our economy growing.
Chancellor of the Exchequer Rachel Reeves said:
We are delivering on our promise to make sure every worker receives a fair wage.
Fair pay which supports working families is integral to our Plan for Change, because when working people are properly rewarded with more money in their pockets, businesses thrive and our entire economy benefits.
To ensure the right balance is struck between the needs of workers, business affordability, and the wider economy, the LPC is being asked to consult on several issues before recommending the new rates.
Baroness Philippa Stroud, Chair of the LPC, said:
We are pleased to receive our remit from the Government. Already, since the beginning of the year, we have spent significant time speaking with workers and employers, to understand the pressures in the economy and the effects of the most recent increases in the minimum wage. We have held a successful call for evidence and received detailed submissions from all sides.
Our recommendations on the minimum wage are always finely balanced. More than ever, it is important that we draw on first-hand evidence from those affected by our decisions. I look forward to working with the rest of the Commission over the autumn to reach a shared view on this evidence and deliver our advice to the Government in October.
TUC General Secretary, Paul Nowak said:
Boosting the minimum wage isn’t just good for workers – it’s good for business too. When low-paid workers have more money in their pockets they spend it locally – supporting shops, cafés and high streets.
That’s why the government is right to set out its ambition to raise the floor of the minimum wage and end the outdated and unfair youth rates.
The minimum wage has been one of the big success stories of the last 25 years – lifting pay at the bottom and proving the doom-and-gloom merchants wrong. But it’s important that it keep rising so that it better reflects what it actually costs to get by in Britain today.
A bolder, more ambitious minimum wage isn’t a risk. It’s the next step in building a fairer, stronger economy where hard work is properly rewarded.
Notes to Editors
- The Government sets the minimum wage rates each year following the advice of the LPC. These recommendations are made by the LPC each October – for minimum wage rates to apply from the following April – in line with the parameters set out in the annual remit from the Department for Business and Trade.
- The Low Pay Commission (LPC) is a social partnership, made up of nine Commissioners equally split between those representing employers’ interests, those representing workers’ interests and independent Commissioners.
- The Low Pay Commission (LPC) conducts extensive consultation, analysis and evidence gathering when recommending the minimum wage rates. They talk to a wide range of stakeholders, including both employers and worker representatives. In 2024, the LPC received evidence and stakeholder views from over 100 organisations through written consultation, oral evidence sessions or visits across the UK.
