Chancellor Rachel Reeves has confirmed that Britain’s main minimum wage rate will rise by 4.1% to £12.71 an hour from next April to keep up with average pay.
The hourly rate for over-21s will rise by 50p to £12.71, with workers aged 18-20 seeing an 85p rise to £10.85, and under-18s and apprentices getting 45p more to £8 an hour.
Reeves said that some 2.7 million people are expected to benefit from the increases when they take effect next year.
However, some businesses have already warned that increasing minimum wage could lead to a slowdown in hiring and possibly job cuts. Britain’s minimum wage is the second-highest in Europe relative to average pay and has risen by more than 60% since 2019 as successive governments sought to lift it to two-thirds of median hourly earnings.
A living wage
However, some groups have argued that minimum wage workers are still not being paid enough.
Compared to the National Living Wage rates coming into effect in April 2026, the difference in salary for someone working full-time is £1,440 less than someone earning the real Living Wage across the UK, and £4,070 less for workers in London than the London Living Wage, says the Living Wage Foundation.
“The boost to the legal minimum wage is a really positive move that will ease some of the pressure on low-paid workers hit by sharp price rises over the last year,” said Katherine Chapman, Director of the Living Wage Foundation.
“It will still fall short of the voluntary real Living Wage, which is the only wage rate based solely on the cost of living. The real Living Wage is currently £13.45 in the UK, with a higher rate of £14.80 in London.”
Chapman noted that over 16,000 employers are already committed to going beyond the statutory minimum to make sure all their workers, including contractors like cleaners and security guards, are always paid a wage that meets living costs so can live with dignity.
“Half the FTSE 100 as well as thousands of smaller companies are part of this movement because they know the real Living Wage is an investment in their workforce which builds a stronger business through better morale, retention and productivity.”
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