News Brief · United Kingdom
Minimum wage increases raise pay for low-income workers
Updated April 2026
The UK National Living Wage for workers aged 21 and over increased by 4.1% to £12.71 an hour on 1 April 2026. The policy raises the legal wage floor, supporting low-paid workers while increasing labour costs for affected employers.
What happened
From 1 April 2026, the National Living Wage rose by 50 pence to £12.71 an hour for workers aged 21 and over. The statutory rate for 18–20-year-olds increased to £10.85, while the 16–17-year-old and apprentice rates increased to £8.00.
Why it matters
A higher wage floor can increase the earnings and real incomes of low-paid workers, potentially raising consumption. It can also increase firms’ labour costs. Whether employment falls, prices rise or productivity improves depends on the size of the increase, labour-demand elasticity, firms’ profit margins and their ability to adjust in other ways.
Exam relevance
Useful diagram: Labour market diagram showing a wage floor above equilibrium
Sources and evidence note
Rates and immediate-impact estimates come from the UK Low Pay Commission. Employment and price effects are economic possibilities rather than automatic outcomes and should be evaluated against labour-market conditions.