National living wage rate goes up 4.1%

National living wage rate goes up 4.1%

The government has confirmed above inflation rises in the national living wage with a 4.1% rise, while national minimum wage will go up 8.5% from 1 April 2026.

This year’s hike to national living wage is down on last year’s 6.7%, which caught employers off guard. This time the hike is closer to the current 3.4% inflation rate.

This means a worker on a 37.5 hour working week would earn £24,784.50 per annum. This is just below the median real terms graduate salary of £26,500, according to Department for Education figures.

These changes mean that from April 2026, the national minimum wage and the national living wage will boost the pay packets of around 2.7 million workers. 

For a full-time worker on the national living wage, that means an increase in pay of £900 a year and for someone on the national minimum wage, working full time, it will mean a £1,500 increase. 

A highly respected economist is quoted as saying ‘The scale of the hikes will surprise many, not least because they may cut against the government’s stated ambition to tackle the “crisis of opportunity” facing younger workers, particularly if higher labour costs ultimately limit hiring.’

The NMW for 16 to 17-year-olds and those on apprenticeships will increase by 6% to £8 per hour. 

Employers will need to build this into their budgets for next year and consider the implications across their workforce as this adds pay pressure up the pay scales. It will be critical for employers to think about their overall reward package to ensure that they remain competitive.