Millions of workers are in line for a pay rise next April, with Andy Burnham's Government confirming a 3.9% increase to the National Living Wage.
The increase means people aged 21 and over who work full-time on the minimum rate will see their gross annual earnings rise by £910 from April 1, 2027, according to HM Treasury.
The National Living Wage will increase from £12.71 to £13.21 an hour, with around 2.3 million workers across the UK expected to benefit from the changes.
Younger workers will also receive a boost, with the National Minimum Wage for those aged 18 to 20 rising by the same percentage.
Their hourly rate will increase from £10.85 to £11.27, also from April 1.
The 3.9% increase is higher than the latest Consumer Prices Index (CPI) inflation figure, which stood at 3.5% in the 12 months to September 2026.
Confirming the changes, HM Treasury said: "To support low-paid workers across the UK, the government is raising the National Living Wage and National Minimum Wages, which is expected to benefit around 2.3 million workers.
"On 1 April 2027, the National Living Wage will increase by 3.9% to £13.21 per hour, equivalent to an increase of £910 in the gross annual earnings of a full-time worker on the National Living Wage. The National Minimum Wage for 18- to 20-year-olds will also increase by 3.9% to £11.27 per hour.
"By accepting the Low Pay Commission's recommendations in full this year, the government is ensuring workers are rewarded fairly for their work, while protecting jobs, backing businesses, and strengthening the conditions for economic growth."
How much more will workers get?
The £910 annual increase applies to someone aged 21 or over working full-time on the National Living Wage.
It is a rise in gross earnings, meaning the figure is before Income Tax and National Insurance deductions.
The new hourly rate of £13.21 will apply from April 1, 2027.
Workers aged 18 to 20 will see their minimum hourly pay increase by 42p, from £10.85 to £11.27.
The latest increase also marks a change in the pace of pay rises for younger workers.
Since Labour returned to power in 2024, the National Minimum Wage for 18 to 20-year-olds has increased by 26%. The 2027 rise brings their increase into line with the percentage increase for workers aged 21 and over, rather than giving younger workers a larger proportional uplift.
Minimum wage rise is above inflation
The 3.9% increase is above the latest CPI inflation rate of 3.5%, recorded by the Office for National Statistics in the year to September 2026.
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The Low Pay Commission (LPC), which advises the Government on minimum wage rates, had previously said the National Living Wage would need to rise by around 3.7% in 2027 to reach £13.18 an hour, keeping pace with its expectations for average pay growth.
However, in March, it changed the LPC's remit to give it more scope to consider labour market conditions when setting the minimum wage for 18 to 20-year-olds.
The new rates will take effect on April 1, 2027.
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