Millions of workers will benefit from an upcoming rule change next month.
Millions of workers will benefit from a pay increase from April 1 (Image: Getty)
A new £12.71 rule has been confirmed for all UK workers aged 21 and over from April in a major pay boost.
The UK Government is increasing the National Living Wage by 4.1% from April 1, raising hourly pay rates from £12.21 to £12.71 per hour. The pay increase will benefit around 2.4 million people on low pay and will give full-time employees a gross annual earnings boost of over £900. According to the Low Pay Commission, an independent body that advises the Government about the National Living Wage and National Minimum Wage, an average worker aged 21 or over working 37.5 hours per week will see their annual gross pay increase by £977 and their monthly gross pay by £81.47 once the new rates take effect from April.
The National Living Wage applies to most workers, whereas the National Minimum Wage is the minimum amount an employer must pay per hour to all workers aged 21 or under. But younger workers are also set to benefit from higher earnings from April as the National Minimum Wage rate will rise by 8.5%.
From April 1, 18- to 20-year-olds will see their pay rise from £10 to £10.85 per hour, narrowing the gap with the National Living Wage.
The pay increase means a full-time worker in this age group will see an annual earnings boost of £1,500, marking further progress towards the Government’s goal of phasing out 18 to 20 wage bands and establishing a single adult rate.
Additionally, the National Minimum Wage for 16- to 17-year-olds and apprentices will rise by 6% from April 1, taking hourly rates from £7.55 to £8.
According to the Government, the April 2026 increases will benefit 2.7 million young and older workers and follow the Government’s acceptance in full of the recommendations made by the Low Pay Commission (LPC) in November last year.
Baroness Philippa Stroud, LPC Chair, said at the time: “The recommendations published today are a product of diligent study of the evidence, careful reflection and significant negotiation. Our advice balances the Government’s ambitions with the need to protect the economy and labour market, with rates that are fair and realistic.
“In our discussions this year with workers and employers alike, it has been clear that no one is having an easy time. Despite sustained real increases in the minimum wage, low-paid workers are still challenged by the cost-of-living crisis. At the same time, employers, particularly small businesses, are under real pressure, exacerbated by this April’s National Insurance changes.
“While GDP growth over the past year has been mixed and the labour market has softened, our judgement is that the recent NLW increases have not had a significant negative impact on jobs.“
The increase in the National Living Wage will ensure a real-terms pay rise for low-paid workers and will meet the government’s aim to ensure the rate doesn’t drop below two-thirds of median earnings. Meanwhile, the increase to the 18 to 20 year old rate makes progress towards alignment with the National Living Wage.
Announcing the boost to pay rates in November last year, HM Treasury said: “We are raising the National Living Wage and National Minimum Wage meaning full-time workers on the National Living Wage see a rise of £900 a year, while full-time workers on the 18-20 National Minimum Wage rate will see a £1,500 rise.”