National Living Wage Increase 2026: The national minimum wage and national living wage will rise by 3.9%, raising the over 21 rate from £12.71 to £13.20 an hour, Chancellor John Healey said.
He said: “I am increasing the national minimum wage and national living wage by 3.9% for 2.3 million of our lowest paid workers.
Mr Healey began his Budget statement by saying it was for “the working people of Britain, for British businesses, big and small” and was built on “fiscal discipline”.
“He is giving Britain some elbow room on the expense of life and the cost of business, firstly.
“Secondly, supporting British business’ enterprise to unleash innovation and growth in every postcode
And third, by solving the big issues on energy, on national security, on public service transformation and housing.”
The Real Living Wage vs The National Living Wage: What’s the Difference?
The genuine Living Wage and the Government’s National Living Wage are sometimes confused with each other, but they are different rates of compensation for different purposes.
The National Living Wage is the minimum employers must pay to eligible workers aged 21 and older. The genuine Living Wage is a voluntary wage, based on the cost of living, independently estimated and updated each year, with a distinct higher rate for London.
The true Living Wage is now £14.10 an hour in the UK and £15.45 in London.
National Living Wage: The Government’s statutory minimum hourly pay rate for eligible workers aged 21 and above.
National Minimum Wage: The lowest legal pay for younger workers, with rates varied by age and apprenticeship status.
The Real Living Wage: an independently computed hourly wage that reflects the cost of living for those who earn it.
London Living Wage: The actual Living Wage rate for London, where it is known that living costs are greater.
The main distinction is that the rates determined by the Government are legal minimums, whereas the genuine Living Wage is a voluntary rate, based on the cost of living.
Who Is Eligible for the Actual Living Wage?
The actual Living Wage is a voluntary pledge by employers, and applies to workers aged 18 and above.
Almost 17,000 firms like IKEA, KPMG and LUSH have signed up to pay it, the Living Wage campaign said. The union believes the effect is that nearly half a million workers get a rise each year.
But workers do not have an automatic legal claim to the genuine Living Wage. They are entitled to the statutory minimum applicable to them unless their employer has agreed a higher rate or their contract provides for one.
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