A new report from the Low Pay Commission (LPC) indicates that the National Living Wage could rise to £12.71 an hour in April 2026, in line with the government’s target to maintain minimum pay at two-thirds of median earnings.

Key Points

• Projected increase: a 4% rise from the current £12.21 to £12.71 per hour for workers aged 21 and over.
• Possible further rise: depending on economic conditions, the LPC says the rate may need to reach £12.86 to meet the government’s target.
• Policy goal: the government has committed to setting minimum pay at two-thirds of median earnings.
• European context: the UK already has the second-highest minimum wage in Europe relative to average earnings.

Age Band Reform Under Review

The government is also considering changes to minimum wage rates for younger workers.

• The current rate for 18–20-year-olds is £10.00 per hour.
• Ministers have called these lower age-based rates “discriminatory”.
• The LPC has been asked to consult on narrowing or removing the gap between youth and adult rates, and will put forward recommendations potentially leading to a single adult rate. 

What Employers Need to Know

• Sectors such as hospitality and retail may be especially impacted.
• Employers should start reviewing budgets, pricing, and staffing plans to prepare for the anticipated rise.
• Final minimum wage recommendations for April 2026 will be made by the LPC in October 2025, with government decisions announced shortly after.

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