Chancellor John Healey has confirmed that the National Living Wage will increase by 3.9% to £13.21 per hour from April 1, 2027, a rise that will benefit millions of UK workers aged 21 and over.
The announcement came as part of the Autumn Budget delivered to MPs on Wednesday, October 28, which pledged to "give families and businesses breathing space" and take action on wages to support household finances.
Pay Rise Details for Full-Time Workers
The uplift from the current rate of £12.71 per hour means full-time workers aged 21 and over will see their gross annual earnings increase by £910 per year. Around 2.3 million people are expected to benefit from the change.
However, tax thresholds remain frozen, which means the higher income could be pushed into a higher tax bracket.
National Minimum Wage Also Increases
Younger workers aged 18, 19 and 20 will also receive a pay boost, with the National Minimum Wage rising by 3.9% from £10.85 to £11.27 per hour in the new tax year.
The government has paused its pledge to bring the minimum wage for 18 to 20-year-olds in line with that for those aged 21 and over. The gap had been narrowing in recent years, and in April this year, the minimum wage for young workers rose by 8.5%.
Government Confirmation and Economic Context
HM Treasury confirmed the pay boost, stating: "To support low-paid workers across the UK, the government is raising the National Living Wage and National Minimum Wage, which is expected to benefit around 2.3 million workers."
"On 1 April 2027, the National Living Wage will increase by 3.9% to £13.21 per hour, equivalent to an increase of £910 in the gross annual earnings of a full-time worker on the National Living Wage. The National Minimum Wage for 18- to 20-year-olds will also increase by 3.9% to £11.27 per hour. By accepting the Low Pay Commission’s recommendations in full this year, the Government is ensuring workers are rewarded fairly for their work, while protecting jobs, backing businesses, and strengthening the conditions for economic growth."
The 3.9% increase to both wage rates is higher than the Consumer Prices Index (CPI) inflation rate, which was confirmed as 3.5% in the 12 months to September 2026 by the Office for National Statistics (ONS).
The Low Pay Commission (LPC), which advises the Government on minimum wage rises, had said earlier this year that the National Living Wage would need to increase by around 3.7% in 2027 to £13.18 an hour to keep up with expected average pay rises, so the Budget announcement goes above this at 3.9%.
In March, the government tweaked the commission's remit to give it more scope to take labour market conditions into account when setting the minimum wage for 18- to 20-year-olds.
The LPC said in April: "Our remit asks us to use the benchmark of two-thirds of median earnings as 'the key reference point' for future rates. We estimate that to maintain the NLW at two-thirds of median earnings, a rate between £13.02 and £13.34 (or an increase of between 2.4 and 5.0 per cent) would be required in April 2027, with a central estimate of £13.18 (3.7 per cent). These projected figures above are indicative only. The final recommended rate will be subject to the LPC’s deliberations later in the year, which must also take account of the state of economy, labour market and living costs."
