LPC recommendations take the National Living Wage to £13.21
Minimum wage rates announced for April 2027
The Government has today announced increases to minimum wage rates from April 2027. The National Living Wage (NLW), the minimum wage rate for all workers aged 21 and over, will rise by 3.9 per cent to £13.21. The minimum wage for 18-20 year olds will increase to £11.27 and the rates for 16-17 year olds and apprentices will increase to £8.31, all of which are 3.9 per cent increases in line with that for the NLW.
In announcing these increases, the Government has accepted in full the recommendations made by the Low Pay Commission.
Although our recommendation for the NLW will not reach the two thirds of median earnings reference point set out in our remit, it still makes progress towards it. Commissioners remain committed to reaching the remit’s key reference point of two thirds of median earnings when economic conditions allow.
While the rate recommended is below that needed to reach the reference point, it is above the range of inflation forecasts from April 2027 to March 2028, with additional allowance made for some upside risk. Therefore, we judge that it will protect the rate in real terms over the period specified in our remit.
The rates announced today are:
| NMW rate from April 2027 | Increase (£) | Increase (%) | |
|---|---|---|---|
| National Living Wage (21 and over) | £13.21 | 50p | 3.9 |
| 18-20 Year Old Rate | £11.27 | 42p | 3.9 |
| 16-17 Year Old Rate | £8.31 | 31p | 3.9 |
| Apprentice Rate | £8.31 | 31p | 3.9 |
| Accommodation Offset | £11.53 | 43p | 3.9 |
Baroness Philippa Stroud, LPC Chair, said:
“Discussions with workers and employers alike this year reflected the tough economic headwinds being faced across the economy. It has been challenging to come to a recommended increase that is both fair to workers and gives employers the resilience they need to grow their businesses.
“We have based our recommendations on a careful marshalling of all the available economic evidence, alongside intense reflection and negotiation between our Commissioners. The advice presented is line with the ambition to protect the economy and labour market, giving fair and realistic rates for the year ahead.
“The wider economic picture has been critical in helping decide the increase for 2027. Economic growth has been better than expected this year, but this growth is not leading to hiring. Furthermore, our stakeholders are worried about the risks of a further energy price shock to the economy.“
The remit for younger workers continues to state the Government’s desire to lower the age of eligibility for the NLW to 18. Over the last 4 years we have made good progress on this aim and increased the 18–20 year old rate substantially, reducing the gap between it and the adult rate.
While there is still potential to lower the age limit, especially for 20 year olds, demand for young workers has slowed and the risks associated with ambitious rises have increased. Therefore, we recommend pausing on alignment by recommending a percentage increase in line with that for the NLW, which we believe is consistent with the remit’s aim of prioritising youth employment. We recommend a 3.9 per cent increase or 42p to £11.27 for 18-20 year olds.
For 16-17 year olds, the vast majority of whom are in full-time education, the recommended increase is 31p to £8.31. Employment for this age group has deteriorated over recent years. The evidence does not point to this being the result of minimum wage increase, however this decline is difficult to ignore so future increases are not risk free.
Apprentices of all ages are entitled to the Apprentice Rate in the first year of their apprenticeship. Although vacancy numbers have declined faster than for all vacancies in the economy, we don’t think that the Apprentice Rate is the key factor here either. In light of this, alongside some concern from employers about the cost of employing apprentices, we are recommending an increase of 31p to £8.31 (3.9 per cent).
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 23 October 2026. The Government has today announced acceptance of those recommendations.
- The LPC has now published 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 March and is available here.
- The LPC expects its recommended rate to represent a real-terms increase across the whole of the period to April 2027, using a range of inflation measures, thereby protecting low-paid workers’ living standards.
- 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 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. , the LPC’s remit requires us to set the rates for younger workers that prioritise employment.
- 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 2027 it will increase to £11.53 per day.
- 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), Matthew Fell, Andrew Goodacre, Louise Fisher, Dr Patricia Rice, Simon Sapper, Professor Jonathan Wadsworth and Janet Williamson.
- Baroness Philippa Stroud can be contacted via the Low Pay Commission’s press office on 07920 531 878.