Minimum Wage Hourly Rates: Potential Increases in 2026

The Government has published the official remit for the Low Pay Commission (LPC) to begin its work on setting the National Minimum Wage (NMW) and National Living Wage (NLW) rates that will apply from April 2026.

While the final figures won’t be confirmed until later in 2025, the direction of travel is already clear. Employers should be prepared for further increases in wage costs in April 2026.

National Living Wage likely to rise again

The Government has reiterated its commitment to ensuring the National Living Wage doesn’t fall below two-thirds of UK median earnings – a benchmark that defines the level of low hourly pay. Based on current forecasts, that means we could be looking at a NLW rate of £12.71 from April 2026, a 4.1% increase.

To put that into context, the current NLW rate for workers aged 21 and over is £12.21, up 6.7% from the previous year.

Narrowing the gap for younger workers

As part of its remit this year, the LPC will be consulting on narrowing the gap between the full NLW rate and the rate that applies to workers aged between 18 and 20 years old. The LPC will be putting forward recommendations on how to achieve a single adult rate in the years ahead.

What should employers do now?

Although the final rates won’t be known until October, these latest estimates are a strong indication of where things are headed. Here are a few things to consider:

• Factor these increases in when reviewing your payroll budgets for 2026.
• Consider the knock-on effect. If the NLW rises, pay for other roles may need to be adjusted to maintain structure and morale.
• Remember employer NICs and pensions. Increases in wages can also affect National Insurance contributions and pension auto-enrolment costs.

How Wilds can help

Rising wage costs can feel like just another pressure on small businesses, but with the right planning you can stay ahead. At Wilds, we work with employers to review payroll, factor in changes like the NLW, and make sure your budgets, NICs and pensions are all accounted for.

If you’d like a practical chat about how these potential increases might affect your business – and how to plan with confidence – get in touch with our team.