The Chancellor of the Exchequer, John Healey, announced increases to the National Living Wage (NLW) and National Minimum Wage (NMW) rates, confirming that the Government has accepted in full the recommendations of the Low Pay Commission (LPC) for increases from 1 April 2027.

The LPC said that it had to balance higher wages for workers with the pressures facing employers. Job vacancies have fallen, and recruitment has been particularly weak in retail and hospitality. The Commission therefore recommended a cautious approach, while ensuring that minimum wage rates continue to rise faster than inflation.

The NLW, which applies to workers aged 21 and over, will increase from £12.71 to £13.21 an hour, a rise of 50p or 3.9%. This represents an annual pay increase of around £910 for someone working full-time and earning the NLW.

The NMW rate for 18 to 20-year-olds will rise from £10.85 to £11.27 an hour, also an increase of 3.9%. The government remains committed to bringing the rate for 18 to 20-year-olds into line with the NLW, but in conjunction with the LPC has paused this process due to slowing demand for young workers and concerns that larger increases could affect youth employment.

The rate for 16 to 17-year-olds will also increase by 3.9%, from £8.00 to £8.31 an hour. The Apprentice Rate will rise to the same level, in line with the LPC’s recommendations.