Britain’s official advisory body on low pay has signalled that the national minimum wage may require an increase close to 3.7% in 2027, which would put an hourly rate near 13.18 pounds. The Low Pay Commission published the figure as part of the start of its yearly consultation with employers, trade unions and members of the public.
The consultation opens at a moment when the 2026 increase of 4.1% to 12.71 pounds an hour for workers aged 21 and over takes effect. The commission cautioned that its projection for 2027 is provisional and that the final hourly minimum could fall anywhere between 13.02 pounds and 13.34 pounds next year, contingent on how broader average earnings develop.
Philippa Stroud, who chairs the commission, emphasised the need to hear a wide range of voices amid current macroeconomic uncertainty. She said, "The current economic uncertainty makes it essential that the Commission hears from those affected by the minimum wage and builds consensus for evidence-based recommendations." The commission framed the consultation as a central part of that evidence-gathering process.
Since April 2020 the national minimum wage has increased by roughly 50%, driven by successive governments' policies to raise the rate to around two thirds of median earnings. As a result, the UK now records one of the highest minimum wages relative to average pay among advanced economies, according to the commission's commentary.
Pay for workers aged 18-20 has climbed even more sharply than for older workers. Many businesses and economists have attributed a marked rise in youth unemployment to that faster increase, noting that youth joblessness reached a 10-year high at the end of 2025.
The Bank of England monitors wage growth closely and regards pay rises slightly above 3% as having the potential to be inflationary. The Low Pay Commission acknowledged that while this level of wage growth draws attention, pay for the lowest earners represents a relatively small portion of the total national wage bill.
Levels of exposure to the minimum wage differ by age group. Around 6% of British workers aged 21 and over receive the minimum wage or amounts very close to it, while roughly 20% of younger workers are in that pay range.
The commission said it was "alert to concerns about young people’s employment prospects" but disputed that the higher statutory minimum was the primary cause of the deterioration in youth employment. Its own analysis indicated that the largest declines in employment among 18-20 year olds over the two years to April 2025 occurred in areas where a high share of young people were already earning above the statutory minimum, with parts of London cited as an example.
On the policy front, Britain’s Labour government has pledged to end what it describes as "discriminatory" lower pay rates for younger workers. In an updated remit issued last month, the government granted the Low Pay Commission "full flexibility" in setting the recommended rate later this year.
Readers should note the exchange rate included with the release: $1 = 0.7586 pounds.
As the commission gathers evidence through its consultation, its provisional 2027 projection and the stated range set out the parameters for debate among employers, unions and policymakers. The final recommendation will reflect inputs received and observed trends in broader earnings growth.