Minimum wage to increase by 4.1% from April, with 6-8.5% increases for younger workers

Ahead of today’s Autumn Budget, some details have been released about the increases to the Minimum Wage.

The Minimum Wage for workers aged 21 and over will rise in line with recommendations from the government’s independent adviser. From April, workers over 21 will see a 4.1% increase to their minimum wage, bringing it up to £12.71 an hour.

Workers aged 18 to 20 will get a bigger increase of 8.5%, to £10.85 an hour, and 16 and 17-year-olds will get a 6% increase to £8 an hour.

New minimum wage hourly rates, from 1 April 2026:

• National Living Wage (over-21s): £12.71 (+ £0.50) (+4.1%)
• 18 to 20-year-olds: £10.85 (+ £0.85) (+8.5%)
• 16/17s and apprentice rate: £8 (+ £0.45) (+6%)

Announcing the changes, Chancellor of the Exchequer Rachel Reeves said:

I know that the cost of living is still the number one issue for working people and that the economy isn’t working well enough for those on the lowest incomes.

Too many people are still struggling to make ends meet and that has to change. That’s why I’m announcing that we will raise the national living wage and also the national minimum wage, so that those on low incomes are properly rewarded for their hard work.

These changes are going to benefit many young people across our country, getting their first job.

Paul Nowak, general secretary of the Trades Union Congress (TUC) said that “the government is delivering on its promise to make work pay”.

Putting more money in people’s pockets is good for workers and good for the economy as it goes straight back into our high streets and local businesses.

However, the director of the Living Wage Foundation, Katherine Chapman, while welcoming the government’s increases to minimum wage rates, says they “fall short” of the ‘Real Living Wage’.

The ‘Real Living Wage’ is a voluntary wage rate based on the cost of living, calculated by the Resolution Foundation. The Living Wage Foundation tries to encourage employers to choose to pay the real living wage, through an accreditation scheme. It currently stands at £13.45 an hour in the UK and £14.80 in London.

Retail trade union Usdaw has welcomed the increases. Joanne Thomas, their general secretary said:

Usdaw very much welcomes these significant pay increases for the lowest paid, after years of pay not keeping pace with prices under the Tories. This is because Labour changed the Low Pay Commission’s remit so that they now take account of the cost of living. Today’s announcement also demonstrates further progress towards ending rip-off youth rates with higher percentage increases for under-21s.

Labour in government is delivering the new deal for workers that Usdaw long campaigned for, despite determined opposition from the Tories, Lib Dems and Reform. Alongside these minimum wage increases, the Employment Rights Bill will deliver fairness by stopping rogue employers undercutting those who treat their staff properly. When passed, it will give workers security, respect and the decency of an income they can live on.

These are welcome protections for workers that should help them through cost of living pressures. This is the transformational change that the country voted for and Labour is delivering, after 14 years of Tory chaos, austerity and attacks on workers’ rights.

Ross Holden, GMB Head of Research and Policy, said:

A much-needed pay rise keeping pace with cost of living is fantastic news for millions of low-paid workers across the country. As well as lifting people out of poverty pay, it’s more cash in people’s pockets to spend on their high street, boosting local economies and growth.

GMB has long campaigned for ‘wages not based on ages’ – and the higher increase for young workers looks like another positive step towards equal pay for equal work, no matter your age.