National Living Wage to rise to £13.21 an hour from 1 April 2027
The Budget confirmed that the National Living Wage for workers aged 21 and over will rise by 3.9% to £13.21 an hour on 1 April 2027. Employers have five months to update pay and payroll.
What changed
On 1 April 2027, the National Living Wage will increase by 3.9% to £13.21 per hour, the government announced in the Budget on 28 October 2026.
The government says the rise is worth £910 a year in gross earnings to a full-time worker on the National Living Wage.
The Budget document also sets new National Minimum Wage rates for workers aged 18 to 20, for 16 to 17 year olds and eligible apprentices, and a new accommodation offset, all from the same date. Our minimum wage answer lists them.
HRjoy’s view
The announcement gives employers five months' notice. The bigger task for many is the knock-on effect on pay just above the minimum, where differentials between roles can disappear. Plan any wider pay review now rather than in March.
Source
General information for employers in Great Britain, not legal advice.
What to do
- Identify everyone paid within reach of the new rate, including staff whose pay sits just above the current minimum.
- Build the April 2027 rates into budgets and pay structures now, and check the effect on pay differentials.
- Update payroll so the new rates apply from 1 April 2027. by 1 April 2027
Related answers
- What are the current National Minimum Wage and National Living Wage rates? From 1 April 2026 the hourly rates are £12.71 for workers aged 21 and over (National Living Wage), £10.85 for ages 18 to 20, £8 for under-18s and £8 for apprentices. The Budget on 28 October 2026 announced new rates from 1 April 2027, including £13.21 for the National Living Wage.
- How should employers calculate holiday pay, including for irregular hours? Workers get a week's pay for each week of statutory leave, usually averaged over the previous 52 paid weeks where pay varies. For irregular-hours and part-year workers, leave accrues at 12.07% of hours worked in each pay period, and all their leave is paid at their 'normal' rate.
- What does equal pay law require of employers? Under the Equality Act 2010, men and women must get equal pay and contractual terms for equal work: like work, work rated as equivalent, or work of equal value. A difference is only allowed where it is genuinely explained by something other than sex, such as location or hard-to-recruit skills.