Minimum Wage Could Rise to £12.71 in 2026

The UK’s minimum hourly wage may need to rise by 4% to £12.71 from April 2026 to stay in line with the government’s target of maintaining pay at two-thirds of median earnings, according to a new report from the Low Pay Commission (LPC).

The proposed increase – a 50p hourly rise for those aged 21 and over – comes amid mounting concern from business leaders about the cumulative effect of rising employment costs.

Whilst we agree that the people in our sector should be paid well, this has to be affordable for businesses. “The headwinds continue. There is no respite for small and medium sized businesses.” said John Lavery, Regional Director for Northern Ireland.

The LPC report also highlights that minimum pay may need to rise even further, to £12.86, depending on future economic conditions. At the same time, the government is considering scrapping age-based wage bands, which could see 18–20-year-olds brought up to the adult rate – a change it has labelled a move against “discriminatory” pay structures.

While the LPC will make its final recommendations in October, the government ultimately sets the new rates for the following April.

Hospitality businesses, already squeezed by national insurance hikes and inflation-linked cost increases, have warned that a sharp wage rise could have unintended consequences.

Kate Nicholls, Chief Executive of UKHospitality, cautioned: “With significant new costs already hitting businesses hard, any significant wage hike may cost jobs… Regrettably, escalating employment costs are already forcing businesses to reduce staff hours and, in some cases, make redundancies.”

She added that any rise must be sustainable and carefully timed to avoid worsening the challenges already faced by the sector.

The LPC will also be required to consider the cost of living as part of its October recommendations. The last minimum wage increase, implemented in April 2025, was 6.7% – one of the largest in recent memory.