LPC recommendations take the National Living Wage to £12.71

The Government has today announced increases to minimum wage rates from April 2026. The National Living Wage, the minimum wage rate for all workers aged 21 and over, will rise by 4.1 per cent to £12.71. The minimum wage for 18-20 year olds will increase to £10.85 and the rate for 16-17 year olds will increase to £8.00.

In announcing these increases, the Government has accepted in full the recommendations made by the Low Pay Commission.

The increase in the National Living Wage will ensure a real-terms pay rise for low-paid workers. It will meet the Government’s aim to ensure the rate does not drop below two-thirds of median earnings. The increase to the 18-20 Year Old Rate makes progress towards alignment with the National Living Wage.

The rates announced today are:

Baroness Philippa Stroud, LPC Chair, said:

“The recommendations published today are a product of diligent study of the evidence, careful reflection and significant negotiation. Our advice balances the Government’s ambitions with the need to protect the economy and labour market, with rates that are fair and realistic.

“In our discussions this year with workers and employers alike, it has been clear that no one is having an easy time. Despite sustained real increases in the minimum wage, low-paid workers are still challenged by the cost of living crisis. At the same time, employers, particularly small businesses, are under real pressure, exacerbated by this April’s National Insurance changes.

“While GDP growth over the past year has been mixed and the labour market has softened, our judgement is that the recent NLW increases have not had a significant negative impact on jobs.“

The 8.5 per cent increase in the 18-20 Year Old Rate makes progress towards the Government’s ambition of extending the NLW to this age group. It is lower than the double-digit increases for this age group in recent years, and the 25 per cent increase which would have been needed to bring these age groups into the NLW this year. The LPC’s advice notes concerns about the strength of the youth labour market. It sets out a path to extend the NLW to 20 year olds in 2027 and to 18 and 19 year olds in 2028 or 2029, subject to economic conditions and Government policy towards young people at the time.

The Low Pay Commission today publishes its advice to the Government and a short report summarising the evidence used in reaching these recommendations.

NOTES FOR EDITORS

• The LPC’s recommendations were submitted to the Government on 27 October 2025. The Government has now announced acceptance of those recommendations.
• The LPC will publish on Wednesday 26 November its letter of recommendations to the Government and a short report summarising the main evidence Commissioners relied on to make those recommendations. The LPC’s full annual report will be laid before Parliament and published in the new year.
• The Government’s remit to the LPC, which determines the Commission’s work through the year, was published in July and is available here.
• The LPC’s recommended NLW rate is intended to meet the Government’s ambition for this rate to reach at least two-thirds of median earnings.
• As in 2024, the Government asked the LPC to take into account the cost of living, including expected trends in inflation between April 2026 and April 2027, when recommending the NLW. The LPC expects its recommended rate to represent a real-terms increase across the whole of the period to April 2027, using any major inflation measure, thereby protecting low-paid workers’ living standards.
• We last published projections in August of the NLW rate needed to achieve the level of two-thirds of median earnings. At the time, our projected range was between £12.55 and £12.86, with a central estimate of £12.71.
• Our assessment of and projections for median earnings rely on the ONS’s Annual Survey of Hours and Earnings (ASHE) and Average Weekly Earnings (AWE) series. These are supplemented by HMRC’s Real Time Information (RTI) data and wage forecasts from the Bank of England and HM Treasury’s Independent Panel of Economic Forecasts.
• The National Living Wage (NLW) is currently the statutory minimum wage for workers aged 21 and over. This age threshold came down from 25 to 23 in April 2021 and from 23 to 21 in April 2024.
• Different minimum wage rates continue to apply to 18-20 year olds, 16-17 year olds and apprentices aged under 19 or in the first year of an apprenticeship. The Government has stated its ambition to reduce the NLW age threshold from 21 to 18; this follows the LPC’s own stated ambition and advice, as set out in the publication The National Minimum Wage Beyond 2024.
• Rates for workers aged under 21, and apprentices, are currently lower than the NLW to reflect lower average earnings and higher unemployment rates. International evidence also suggests that younger workers are more exposed to employment risks arising from the pay floor than older workers. Unlike the NLW (where the possibility of some consequences for employment have been accepted by the Government), the LPC’s remit requires us to set the rates for 16-17 year olds and apprentices as high as possible without causing damage to jobs and hours.
• The National Living Wage is different from the UK Living Wage and the London Living Wage calculated by the Living Wage Foundation. Differences include that: the UK Living Wage and the London Living Wage are voluntary pay benchmarks that employers can sign up to if they wish, not legally binding requirements; the hourly rate of the UK Living Wage and London Living Wage is based on an attempt to measure need, whereas the National Living Wage is based on a target relationship between its level and average pay; the UK Living Wage and London Living Wage apply to workers aged 18 and over, the National Living Wage to workers aged 21 and over. The Low Pay Commission has no role in the UK Living Wage or the London Living Wage.
• The Accommodation Offset is an allowable deduction from wages for accommodation, applicable for each day of the week. In April 2026 it will increase to £11.10 per day.
• For an NLW worker working 37.5 hours per week, the increases announced today will increase their annual gross pay by £977 and their monthly gross pay by £81.47.
• The Low Pay Commission is an independent body made up of employers, trade unions and experts whose role is to advise the Government on the minimum wage. The rate recommendations introduced today were agreed unanimously by the Commission.
• The current Low Pay Commissioners are: Baroness Philippa Stroud (Chair), Nigel Cotgrove, Matthew Fell, Andrew Goodacre, Louise Fisher, Professor Patricia Rice, Simon Sapper, Professor Jonathan Wadsworth and Janet Williamson.
• Baroness Philippa Stroud can be contacted via the Low Pay Commission’s press office (07341 098734).