Millions of workers across the United Kingdom could see their pay packets rise significantly in 2026, as new proposals from the Low Pay Commission (LPC) suggest a substantial increase to the National Minimum Wage and National Living Wage.
Under the plans, published as part of the government’s latest remit to the LPC, the central projection for the National Living Wage (NLW) — the statutory minimum rate for workers aged 21 and over — is set at £12.71 an hour from April 2026. This marks a 4.1% increase from the current rate of £12.21, already in place as of 2025.
However, the LPC has acknowledged that these figures are estimates and subject to change depending on wider economic factors. As such, the forecast includes a range between £12.55 and £12.86, with the higher end representing a 65p hourly increase. For full-time workers on a standard 37.5-hour contract, this uplift could mean an additional £24 per week, equating to £96 per month or £1,152 over the course of a year.
This proposed rise stems from the government’s ongoing commitment to aligning minimum pay with the cost of living, reflecting its pledge to ensure wages provide genuine financial support to UK workers, especially in a post-pandemic economy still grappling with inflationary pressures and economic uncertainties.
Evidence-led approach to delivering inclusive growth
The government’s determination to support both workers and employers through a balanced wage strategy is anchored in research and economic analysis.
According to Angela Rayner, the remit asks the LPC to recommend a rate that will ensure the National Living Wage represents at least two-thirds of UK median earnings for adults aged 21 and above. This move is designed to align statutory pay floors more closely with average wage growth and inflation, without creating adverse effects for employment levels.
A move toward fairness across age groups
The government has also reiterated its plan to abolish age bands that previously allowed for lower minimum wage rates based on age, particularly for workers over 18 but under 21. This step is seen as a move toward greater fairness and consistency in wage policy.
While the National Living Wage already applies to those aged 21 and above, current regulations permit employers to pay workers aged 18 to 20 a lower rate. The government’s intention to remove these distinctions reflects its view that adult workers should receive equal treatment, irrespective of age.
In line with this, the LPC has been tasked with conducting further consultation on how best to close the wage gap between age groups. The outcome of this process will help inform future minimum wage rates for younger workers, with any changes expected to take effect from April 2026.
Rayner welcomed the LPC’s consultative approach, noting: “In your advice to the government last October, you stated your intention to consult ‘on the appropriate pace and approach to closing the gap between the rates’; we welcome this consultative approach to this important decision.”
Looking ahead to April 2026
The final recommendation from the LPC is expected to be delivered to the government later in 2025, following the conclusion of stakeholder engagement and labour market analysis. The confirmed rate will then take effect in April 2026, subject to any legislative changes and further economic developments.
As inflation levels stabilise and the broader economy shows signs of gradual recovery, this latest pay proposal represents a significant step toward reinforcing financial security for low-paid workers. It also demonstrates the government’s evolving focus on equity, pay progression, and sustainable earnings for people at the lower end of the wage spectrum.
