Minimum wage set to hit £13.40 in the UK in 2027
Key Points
- The UK minimum wage could rise to around £13.40 in 2027.
- Median hourly pay grew 5.9% in the year to April 2026.
- The LPC’s April estimate for 2027 was £13.18.
- Low pay rose to 2.8% of employees, the first rise in 15 years.
- The gender pay gap among top earners grew to 17.3%.
The UK minimum wage could rise to around £13.40 in 2027, according to the Resolution Foundation.
The think tank made the estimate on Thursday (22 October) in response to the ONS Annual Survey of Hours and Earnings (ASHE), which showed median hourly pay grew 5.9% in the year to April 2026.
In April, the Low Pay Commission (LPC) put its central estimate for the 2027 minimum wage at £13.18. The LPC based that figure on the earnings data available at the time, which showed average earnings growth of 3.8% in the year to January 2026.
The government has tasked the LPC with using two-thirds of median hourly pay as a key reference point when it sets the minimum wage. Faster pay growth means the minimum wage would need to rise to closer to £13.40 next year to stay pegged to that level, the Resolution Foundation said.
The LPC now has more flexibility over minimum wage rates than in previous years, however, and may choose a different increase from the one the new data implies.
“Today’s data may have implications for next year’s minimum wage,” said Nye Cominetti, Principal Economist at the Resolution Foundation.
“However, the LPC now have more wiggle room on setting minimum wage rates, so the final number will come down to their judgement,” Cominetti added.
Low pay stops falling
The ASHE data also showed that the share of UK employees on low pay stopped falling for the first time in 15 years. The proportion of employees earning less than two-thirds of median hourly pay rose to 2.8% in April 2026, up from 2.6% a year earlier.
The Resolution Foundation said low pay has stopped falling because recent governments have increased the minimum wage in line with median earnings. The rate remains far lower than a decade ago, when one in five UK employees earned low pay.
“Low hourly pay in the UK has stopped falling for the first time in over a decade. This is the result of the minimum wage moving to a ‘hold steady’ phase after years of being ramped up,” said Cominetti.
The gender pay gap in hourly pay continued to narrow, falling from 13% to 12.3% across all employees and from 7.2% to 6.8% among full-time workers.
Among full-time top earners at the 90th percentile, the gap has grown from 14.9% in 2023 to 17.3% in 2026.
