The Low Pay Commission has published a new consultation on future minimum wage rates ahead of its recommendations to Government later this year, considering how to extend the full NLW rate to 18-20 year olds.
In the consultation, the Commission indicates that to maintain a trajectory of two thirds of median earnings for the NLW, the rate would reach somewhere between £12.50 and £12.80 per hour in 2026, with a current median estimate of £12.65 per hour. However, the Commission also states that there’s a lot of unpredictability in the current economic conditions so these estimates could change in the coming months.
The Government has not yet published its remit for the National Living Wage in 2026, which sets out the areas that the Low Pay Commission are tasked with considering, but the Commission is considering how to meet the Government’s ambition of the full National Living Wage rate applying to all workers aged 18 or over.
The Commission is currently considering two options for that target:
- Reduce the age of entitlement by one age group at a time. That is, first extend the NLW to 20 year olds, then 19 year olds, then 18 year olds. Rates for the remaining age groups (e.g. 18-19 year olds) could be moved closer to the NLW as they prepare to move over.
- Align the 18-20 Year Old Rate with the NLW over a number of years. This would require the 18-20 Year Old Rate to increase faster than the NLW until the two were equal and the 18-20 Year Old Rate was abolished.
ACS will be gathering evidence from retailers as part of its Employment Survey to inform the Low Pay Commission ahead of recommendations on wage rates later this year.
The current National Living Wage rates are as follows:
- National Living Wage (21 and over): £12.21 per hour
- 18-20 Year Old Rate: £10.00 per hour
- 16-17 Year Old and Apprentice Rate: £7.55 per hour
The full consultation from the Low Pay Commission is available here: https://www.gov.uk/government/consultations/low-pay-commission-consultation-2025
