Minimum Wage and National Living Wage 2027: New UK Rates from April
Minimum wage 2027 at a glance
The government confirmed the April 2027 minimum wage rates in the Budget on 28 October 2026, accepting the Low Pay Commission’s recommendations in full. From 1 April 2027 the National Living Wage for workers aged 21 and over rises from £12.71 to £13.21 an hour. The 18–20 rate, the 16–17 rate and the apprentice rate all rise by the same 3.9%. The Treasury puts the gain for a full-time worker on the National Living Wage at about £910 a year and says around 2.3 million workers will see a rise.
The new rates from 1 April 2027
National Living Wage (21 and over): £12.71 → £13.21 (+50p).
18–20 year old rate: £10.85 → £11.27 (+42p).
16–17 year old rate: £8.00 → £8.31 (+31p).
Apprentice rate: £8.00 → £8.31 (+31p).
Accommodation offset: £11.10 → £11.53 a day.
Minimum wage rates change on 1 April, five days before the new tax year starts on 6 April. The new rate applies from the first pay reference period that begins on or after 1 April 2027, so for monthly-paid staff whose pay period starts mid-month the old rate can still apply to the first part of April.
Who is entitled to which rate
The National Living Wage covers almost everyone aged 21 and over who counts as a worker: full-time, part-time, casual, agency and zero-hours staff, and apprentices aged 19 or over who have finished their first year. The apprentice rate applies only to apprentices under 19, or 19 and over in the first year of their apprenticeship. Once that year is over, they move to the rate for their age.
The minimum wage does not apply to the genuinely self-employed, to company directors without an employment contract, or to volunteers. If you run a sole trader business and pay yourself from profits, there is no minimum wage to meet. If you hire a contractor who in practice works like an employee, there may be.
What a minimum wage worker costs in 2027/28
Pay is only part of the bill. Employer National Insurance stays at 15% on earnings above £5,000 a year, a threshold the Budget left frozen, and you must put at least 3% of qualifying earnings into a workplace pension for eligible staff.
If you are eligible for the Employment Allowance, it still takes up to £10,500 off your employer National Insurance bill for the year, which for many small businesses cancels the National Insurance on the first three or four minimum wage staff.
Staying compliant
Most minimum wage underpayments are not deliberate. The usual causes are deductions and unpaid time that pull the effective hourly rate below the legal minimum:
charging for uniforms, tools or training, or deducting them from pay,
salary sacrifice arrangements that take pay below the minimum,
unpaid time spent on handovers, security checks, travel between jobs or mandatory training,
forgetting a birthday that moves a worker into a higher age band.
HMRC can order you to repay arrears at current rates plus a penalty of up to 200% of the underpayment, capped at £20,000 per worker, and employers above a threshold are publicly named. From 2026 enforcement sits with the Fair Work Agency, which can look back six years, so keep pay and hours records for at least that long.
Before the first April payroll, list every worker, their age on 1 April 2027 and their current hourly rate, then raise anyone below the new minimum for their band. Check again on each birthday that crosses 18 or 21, and on the anniversary of any apprentice’s start date. If your payroll software applies the rates automatically, check it shows the new figures on the payslip – our guide on how net pay is calculated from gross pay explains what employees will see.
What comes next
The government still intends to end the separate 18–20 rate and extend the National Living Wage to everyone aged 18 and over, but the Low Pay Commission recommended pausing that step for 2027 to protect young people’s job prospects. Expect the commission’s next remit in spring 2027 and the April 2028 rates to be confirmed at the 2027 Budget.
FAQ:
1. What is the minimum wage in the UK from April 2027?
The National Living Wage for workers aged 21 and over is £13.21 an hour from 1 April 2027. The 18–20 rate is £11.27, and the 16–17 and apprentice rates are £8.31.
2. When does the 2027 minimum wage increase take effect?
From 1 April 2027. The new rate applies to the first pay reference period starting on or after that date.
3. How much is a full-time worker on the National Living Wage paid a year?
On 37.5 hours a week, £25,759.50 before tax. On 35 hours, about £24,042. The Treasury’s figure of a £910 annual increase is based on a 35-hour week.
4. Do I have to pay myself the minimum wage as a sole trader?
No. The minimum wage applies to workers and employees, not to the self-employed drawing income from their own business.
5. Does an apprentice aged 22 get the apprentice rate?
Only in the first year of the apprenticeship. After that they are entitled to the National Living Wage of £13.21.
Conclusion:
The 2027 rise is smaller than the increases of recent years, but on top of a frozen National Insurance threshold it still adds over £1,000 a year to the cost of each full-time minimum wage worker. Put the new rates into your budget now, run the age check before the first April payroll, and treat deductions and unpaid time as the real compliance risk – that is where most underpayment fines come from.
