Earlier this month, the Government published the Low Pay Commission’s forecast for the National Living Wage (NLW) rates that could apply from April 2026. These figures are indicative and not final recommendations but are based on the Government’s directive that the NLW must not fall below two-thirds of median UK earnings.
The Low Pay Commission acknowledges the challenge in forecasting future rate increases, especially since wage growth has already outpaced expectations and may continue to do so. Despite this uncertainty, the Low Pay Commission is currently working with a projected NLW range of £12.55 to £12.86 per hour for workers aged 21 and over. This estimates a 4.1% increase, bringing the NLW to £12.71 per hour, an increase of 50p.
These updated projections are higher than earlier ones, reflecting stronger-than-anticipated wage growth in 2025. The Low Pay Commission will present its final recommendations to the Government by the end of October 2025, considering factors such as:
- Cost of living
- Inflation forecasts (April 2026 – April 2027)
- Labour market conditions
- Business competitiveness
- Overall macroeconomic trends
Changes to age bands?
The Government has expressed its commitment to removing what it calls “discriminatory age bands” for adult workers. It has asked the Low Pay Commission to consult on this and explore how the NLW could be extended to younger workers, particularly those aged 18 to 20 who currently earn £10.00 per hour.
In reviewing this, the Low Pay Commission is expected to consider:
- The impact on youth employment
- The importance of encouraging continued education or training
- The broader implications for the economy
Apprenticeship rates
The Government has also instructed the Low Pay Commission to set the apprenticeship rate “as high as possible” without harming apprentices’ long-term employment prospects.
When will final 2026 rates be confirmed?
As is standard, the Government is expected to announce the final 2026 rates in November, with changes taking effect from April 2026.
For more information on the issues raised in this article, please contact a member of the Glaisyers ETL Employment team.
