On the 5 August 2025, the Government published the Low Pay Commission’s (LPC) remit for the rates of National Minimum Wage (NMW) and National Living Wage (NLW) that will apply from April 2026.
Earlier this year in May, the LPC published a consultation seeking input to shape the recommendations it will make to the Government on minimum wage rates to apply from April 2026. The consultation concluded in June 2025.
Part of the consultation asked for views on how to approach government proposals to extend the NLW to all workers aged 18 and over. They were keen to understand what the impact of a reduction in the age threshold might be and how best to approach this, for example, in stages by reducing the age of entitlement by one age group at a time.
This would involve firstly reducing the age to 20, then 19, or another option being to continue the ongoing closer alignment of the earnings bands for those aged 18-19 by way of the significant percentage rises in rates over a number of years to align with NLW in the longer term, this would support the level of percentage rises year on year that is currently observed for these groups.
The Government asks the Low Pay Commission to ensure that the National Living Wage rate does not drop below two-thirds of UK median earnings for workers in the National Living Wage population and the updated LPC remit, as a result of factors set out in the standards that take account of the cost of living and inflation forecasts between April 2026 and April 2027.
With this in mind the LPC central estimate is that a NLW increase to £12.71 (4.1%) would ensure the NLW does not fall below two-thirds of median earnings. However, predicting this figure is challenging, so we project a range around our central estimate which runs from £12.55 to £12.86.
This was an increase on previous estimates published in the consultation earlier as LPC stated: Our central estimate then was £12.65 (3.6%) with a range of £12.50 to £12.80. The reasons for the increase are twofold: average wage growth has proven stronger than forecast so far this year, and as a consequence, forecasts for wage growth in 2025 have also increased.
Whilst LPC make clear that recommendations are not purely formulaic, taking account of economic conditions means the figures are purely indicative at this stage.They will finalise recommendations and provide advice to the Government by end of October 2025 on the NLW and NMW rates to come into effect in April 2026.
