UK Minimum Wage Hike : Announces 4.1% Minimum Wage Increase to £12.71 From April 2026
Government Aims to Align Low-Income Wages With Earnings Growth
Britain will raise its national minimum wage to £12.71 per hour starting April 2026, marking a 4.1% increase for workers aged 21 and above. The government confirmed the hike on Tuesday, emphasizing its commitment to ensuring fair pay for low-income earners. Around 2.4 million workers will benefit from the rise, while younger employees and apprentices will see their wages increase by 6% to 8.5% as part of efforts to eliminate lower youth pay rates.
Mixed Reactions From Businesses and Economists
Finance Minister Rachel Reeves defended the decision, stating it ensures workers are “properly rewarded for their hard work.” However, the move has faced backlash from the hospitality industry, which warns that higher wage costs could force businesses to raise prices, potentially fueling inflation. Kate Nicholls, chair of UKHospitality, argued many firms have already exhausted their ability to absorb rising expenses.
The wage hike comes as the UK grapples with persistent inflation, which stood at 3.6% in October—the highest among major advanced economies. The Bank of England has cautioned that wage growth exceeding 3% could hinder efforts to bring inflation down to the 2% target, particularly given weak productivity trends.
Low Pay Commission Defends Decision Amid Economic Concerns
Despite business concerns, the Low Pay Commission, which recommended the increase, stated there is no substantial evidence that previous wage hikes have negatively impacted job growth. The UK’s unemployment rate currently sits at 5%, the highest since 2021. The commission noted it carefully weighed the rising cost of living for workers against the financial pressures on employers, especially with upcoming tax increases expected in the next budget.
