Government sets out Low Pay Commission’s remit for 2026 NLW and NMW rates
The government has confirmed the factors the Low Pay Commission must consider when recommending new minimum wage rates for April 2026, including a continued focus on removing age-based pay bands for adults.
Understanding the government’s remit
On 5 August 2025, the government published its remit to the Low Pay Commission (LPC) seeking recommendations on the National Living Wage (NLW) and National Minimum Wage (NMW) rates to apply from 1 April 2026.
For workers aged 21 and over, the LPC is asked to ensure the NLW does not fall below two-thirds of median earnings, taking account of the cost of living, inflation forecasts between April 2026 and April 2027, labour market impacts, business competitiveness and wider economic conditions. The LPC currently estimates that an increase to £12.71 (4.1%) would be needed to meet this threshold, with a projected range of £12.55 to £12.86. The government has also asked the LPC to identify the criteria for increasing the NLW beyond two-thirds of median earnings within this Parliament.
For 18 to 20-year-olds, the government has confirmed its commitment to removing discriminatory age bands for adults. The LPC will use evidence from its recent consultation to inform recommendations on how to lower the NLW age threshold – either by reducing it one age group at a time or by aligning the rate for 18 to 20-year-olds with the NLW over several years. In doing so, it must consider impacts on youth employment, incentives to remain in training or education, and the wider economy.
The LPC is also asked to make recommendations on rates for under 18s, apprentices and the accommodation offset, with the aim of setting rates as high as possible without harming employment prospects.
The LPC’s recommendations are due in October 2025.