What could minimum wage rates look like in 2026?
As part of efforts to increase economic growth, the Government has asked the Low Pay Commission (LPC) to make recommendations on the rate of National Living Wage (NLW) and National Minimum Wage (NMW) to be applied from 1 April 2026.
The LPC has been instructed to balance fair pay with protecting employment prospects, particularly for younger workers, and to make separate recommendations for the NLW, NMW, and the NMW for 18–20-year-olds.
National Living Wage (NLW)
The LPC has been asked to make sure the NLW rate stays above two-thirds of UK median earnings for those working, while also considering:
- forecasted inflation between April 2026 and April 2027
- the cost of living
- the labour market
- wider conditions from a macroeconomic standpoint
Further to this, the LPC will research which criteria would need to be met to allow the NLW’s baseline target to increase further than the current two-thirds of UK median earnings within the course of the current Parliament.
National Minimum Wage (NMW)
The Government is committed to phasing out age bands within the NMW. To support this, the LPC will:
- Run a consultation to inform its recommended rates from April 2026
- Assess how changes may affect youth employment, education choices, and the wider economy
- Aim to narrow the gap between the NMW and NLW
For under-18s and apprentices, the LPC will look into setting the rate as high as possible without negatively affecting each group’s employment prospects.
Next steps
The LPC will report their recommendations back to the Government by the end of October 2025, giving the Government time to review and make decisions ahead of April 2026.
Following the changes to NMW and National Insurance (NI) contributions earlier this year, the Government will have to carefully balance the cost of increasing NLW and NMW to businesses with the benefits it will provide workers.
We’re here to help
If you have been affected by the NMW and NI changes earlier this year or are concerned about potential further changes next year, we have created a comprehensive Business Resilience Toolkit which provides insights on protecting cash flow, strengthening business structure, maximising growth opportunities, and safeguarding your future.
