Chancellor John Healey is expected to announce an above-inflation increase to the minimum wage in Wednesday's Autumn Budget, with the adult national living wage rising by 3.9% to around £13.20 from next April, up from £12.71.
The lower rate for 18 to 20-year-olds would also rise by 3.9% to around £11.27, though it will not be aligned with the adult wage. Labour previously pledged to do this as soon as possible.
Inflation and real-terms pay
These increases are higher than the latest annual Consumer Prices Index (CPI) inflation rate, which was 3.5% in the 12 months to September 2026. Adults may see a real-terms pay increase, because inflation is expected to peak above 4% in the next few months before easing at the start of next year.
The hike may come as a blow to businesses, which said the rising minimum wage is yet another hit to their bottom line as bills spiral. They said it was pricing young people out of the job market and affecting their ability to hire at a time when almost one million young people in the UK are not in education, employment or training (NEETs).
Business concerns and youth employment
Hospitality business owners previously told the Express how they had to lay off staff due to rising costs, including minimum wage, higher National Insurance contributions, VAT on hot food purchases, and rising energy bills. Others said they can hire an experienced set of hands for just over a pound more per hour, so there is no incentive to hire entry-level workers.
However, the Chancellor reportedly said he has listened to their concerns, and the decision to keep the youth minimum wage separate reflects these industry calls to reduce hiring costs for young people.
Previous increases and outlook
This April's increase was much higher for younger people, rising by 8.50% from £10.00 to £10.85 per hour for those aged 18 to 20. It increased by 4.10% for adults, up from £12.21 to £12.71.
Youth employment has had to be a key focus for the Government, and it has also been urging businesses to play their part in providing more opportunities. This boost is broadly in line with the average wage growth across the UK. The rise is at the upper end of earlier estimates from the Low Pay Commission, which advises ministers on wage rates.
