UK’s Low Pay Commission forecasts 4.1% rise in minimum wage to £12.71 by 2026

The UK’s Low Pay Commission (LPC) has projected a 4.1% increase in the National Living Wage (NLW) to £12.71 per hour by April 2026. This adjustment aims to align the NLW with the government’s goal of ensuring it remains at two-thirds of median earnings. The LPC’s central estimate places the NLW within a range of £12.55 to £12.86, reflecting stronger-than-expected wage growth in recent months.

In April 2025, the NLW rose by 6.7% to £12.21 per hour, marking one of the highest real values in the UK’s minimum wage history. This increase was part of the government’s commitment to improving living standards for working individuals.

The LPC’s updated projections consider various economic factors, including inflation forecasts, cost of living, and broader macroeconomic conditions. However, the commission emphasized that these figures are indicative and subject to change based on evolving economic circumstances.

Approximately 6.5% of UK workers currently earn the minimum wage, with significant concentrations in sectors such as retail, hospitality, and cleaning. The government’s approach aims to balance the need for fair wages with the potential impact on employment and business competitiveness.

The LPC is expected to provide its final recommendations to the government by the end of October 2025, after considering further economic developments and stakeholder feedback. This process underscores the government’s ongoing commitment to supporting low-paid workers while maintaining a competitive and resilient economy.