In late November, the Government announced the updated National Minimum Wage (‘NMW’) rates which will come into force on 6 April 2026. Each age bracket has received an increase; the UK Government has estimated that 2.7 million workers will receive an increased salary when the changes come into effect.
National Minimum Wage rates:
| Current Rate | New Rate | Increase £ | Increase % | |
| Aged 21 and over (National Living Wage) | £12.21 | £12.71 | 0.50p | 4.1% |
| Aged 18-20 | £10 | £10.85 | 0.85p | 8.5% |
| Aged 16-17 | £7.55 | £8.00 | 0.45p | 6.0% |
| Apprentice Rate | £7.55 | £8.00 | 0.45p | 6.0% |
These align with the recommendations provided to the Government by the Low Pay Commission’s consultations. These consultations took place between 2 May and 30 June 2025, with the recommendations addressed and sent to the Prime Minister and the Secretary of State on 26 November 2025. The recommendations take into account the cost of living, inflation costs, business-running costs, the labour market’s economy and the National Living Wage.
What is National Minimum Wage (‘NMW’)
This is the minimum rate of hourly pay that workers are entitled to. The rates are based on age brackets and are mainly applicable to workers who are aged 20 and below. The apprentice rate applies to workers who are under 19 or workers who are 19 and over and in the first year of their apprenticeship. Where apprentices are over 19 and are in their second or more year of their apprenticeship, they are entitled to the appropriately aged NMW hourly rate.
The NMW does apply to workers who are aged 21 and over.
The NMW are statutory minimum levels of pay which employers must legally pay. If workers’ contracts do not entitle them to the correct NMW, their employment contract is not then legally binding.
What is National Living Wage (‘NLW’)
The highest rate of NMW is called the National Living Wage. It applies exclusively to workers ages 21 and over and ensures that mature and more experienced workers receive a higher wage to reflect what they bring to their job and the cost of living experienced by them.
Those who are entitled to NLW include, but are not limited to:
- Company Directors;
- Self-employed people who run their own business;
- Prisoners;
- People working and living within a religious community;
- Members of the armed forces;
- Further education students on work placements for up to one year; and
- People on government pre-apprenticeship schemes.
See more on GOV.UK – National Minimum Wage and National Living Wage rates
What is Real Living Wage (‘RLW’)
The RLW rates are calculated separately by the Living Wage Foundation and reflect the UK cost of living and are encouraged to employers to enable the recipients to live a better standard of living. They apply to all workers 18 and over, with no age bracket-based increases.
The RLW rates are voluntary for employers. Those who decide to pay their workers these rates are accredited and certified by the Living Wage Foundation. Currently over 16,000 UK businesses chose to pay their workers the RLW; this equates to almost 500,000 employees on these rates.
Current accredited Employers include:
- Shakespeare’s Globe;
- Transport for London;
- National Theatre;
- IKEA;
- Burberry;
- Nationwide;
- Oxfam; and
- The Royal Albert Hall.
From October 2025, the RLW rates are:
- London: £14.80 per hour (The London Living Wage)
- The rest of the UK: £13.45 per hour
Employers have until the 1st of May 2026 to implement these new rates.
Impacts of the increase in NMW and next steps:
Employers must be alive to the increased NMW rates to ensure the correct updates are made to their workers’ pay when the rates increase on 6 April 2026 . Employers should continue to review their pay structure and to update employment contracts where necessary. It is important for employers to begin future planning in consideration of the increase in wages for both current and future workers.
Where employers do not comply with the new NMW from 6 April 2026, they could be required to pay the owed money to the employee over a period backdating up to 6 years where the correct NMW has not been paid. Employers in these situations could also face fines of up to £20,000 total, or £100 for each impacted worker. These will be imposed by HM revenue and Customs. The UK Government also has the ability to name offending employers who have failed to pay the correct NMW wages.
Employers who identify that they have paid their workers below the correct NMW rates must pay such workers arrears immediately.
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