Cost & Risk
What the 2027 Minimum Wage Rise Means for Your Budget
24 August 2026 · Outsourcery
The Low Pay Commission projects the National Living Wage could rise to around £13.18 an hour from April 2027, up from the current £12.71, with a possible range as high as £13.34. The final figure won't be confirmed until the government responds to the Commission's recommendations, expected in October, but founders budgeting for next year don't need to wait for the official announcement to start planning.
What we know so far
The Low Pay Commission's remit for 2026 asked it to keep the National Living Wage at two-thirds of median hourly earnings, and its current projections, published as part of ongoing consultation, put the 2027 rate in a range of £13.02 to £13.34, with a central estimate of £13.18, an increase of roughly 3.7% on the current £12.71. The Commission is due to submit its final recommendations to government by October 2026, with the rate typically confirmed around the Autumn Budget before taking effect the following April.
Alongside the headline rate, the Commission has also been examining whether to bring 20 year olds into the National Living Wage bracket in 2027, a change that, if adopted, would extend the higher rate to a group currently sitting on the lower 18-20 rate.
Why this is worth budgeting for now, not in October
These figures are projections, not confirmed rates, and the Commission is explicit that they could shift depending on economic conditions between now and its final recommendation. But the direction of travel has been consistent for several years running, and the practical cost of waiting for the official confirmation is that it arrives at the same time as every other business is reacting to it, alongside whatever else lands in the Autumn Budget. Founders who model the central estimate into their 2027 planning now have a genuine head start on pricing, staffing decisions and client contracts that span the April increase, rather than scrambling to absorb it once it's confirmed.
It's also worth remembering this isn't the only cost pressure moving in the same direction. Employer National Insurance contributions rose in April 2026, and general wage growth has continued through the year, meaning the all-in cost of a UK hire has been climbing on multiple fronts simultaneously, not just through the statutory minimum.
What this means for your hiring plan
If any of your roles sit at or near the National Living Wage, or you employ workers in the 18-20 bracket who could be brought into scope, it's worth running the central estimate through your 2027 budget now rather than treating it as a surprise next spring. That's a straightforward exercise for a handful of roles, but it compounds quickly across a growing team, which is exactly where the total cost of a UK hire, National Insurance, pension contributions and statutory minimums combined, starts to look very different from the headline salary. We've broken that full picture down in our piece on what's really driving the true cost of a UK hire.
FAQ
What is the National Living Wage expected to rise to in April 2027? The Low Pay Commission's central estimate is £13.18 an hour, within a projected range of £13.02 to £13.34, though the final figure won't be confirmed until later in 2026.
When will the 2027 National Living Wage rate be confirmed? The Low Pay Commission is due to submit its recommendations to government by October 2026, with rates typically confirmed around the Autumn Budget.
Could 20 year olds be brought into the National Living Wage bracket? The Low Pay Commission has proposed this as part of its 2027 recommendations, which would extend the higher NLW rate to a group currently on the lower 18-20 rate.
Is the projected rise definite? No. The Low Pay Commission is explicit that these are projections, not confirmed figures, and they may change based on economic conditions before the final recommendation.
Should I wait for the official announcement before budgeting for 2027? It's generally safer to model the central estimate into planning now, since the direction of travel has been consistent for several years, and early planning avoids being caught out alongside every other business reacting at once.
Sources
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