National Minimum Wage 2026 increases as many workers are underpaid

From April 2026 the National Living Wage will rise by 4.1% to £12.71 an hour for eligible workers aged 21 and over, which the Government said will increase gross annual earnings of a full-time worker on the rate by £900, benefiting around 2.4 million low-paid workers. For anyone on a 37.5 hour a week contract, that's £24,784.50 a year.

The National Minimum Wage rate for 18 to 20-year-olds will increase by 8.5% to £10.85 an hour, narrowing the gap with the National Living Wage.

This will mean an annual earnings increase of £1,500 for a full-time worker, which the Government said marks further progress towards its goal of phasing out 18 to 20 wage bands and establishing a single adult rate.

The National Minimum Wage for 16 to 17-year-olds and those on apprenticeships will increase by 6% to £8 an hour.

The increases will benefit a total of 2.7 million young and older workers, said the Government, adding that by seeking expert and independent advice, it was able to ensure that the right balance is struck between the needs of workers, the affordability for businesses and the opportunities for employment.

The real living wage is currently £13.45 an hour in the UK and £14.80 in London.

£6 million repaid to workers as Government cracks down on employers underpaying their staff

Nearly 500 employers fined over £10 million for failing to pay the National Minimum Wage https://t.co/6hhztOoxkb

— Viviane: 🌹Labour led by Keir for me (@LaindonFEMINIST) January 19, 2026

How many employers don't pay the minimum wage?

Estimates vary, but almost 500 employers who failed to pay the minimum wage have been fined recently. Around 42,000 workers have been repaid by their employers, including well-known high street brands, with employers receiving fines totalling £10.2 million for breaking the rules.

Business Secretary Peter Kyle says: "Every worker deserves a fair day’s pay for a fair day’s work, and this government will not tolerate rogue employers who short-change their staff.

"I know that no employer wants to end up on one of these lists. But our Plan to Make Work Pay cracks down on those not playing by the rules.

"This ensures a level playing field where all businesses pay what they owe whilst workers receive the boost to their living standards they deserve."

This action comes as the Government introduces the biggest upgrade to workers’ rights and enforcement for a generation through its Plan to Make Work Pay, which is set to directly benefit around 15 million, or half of all UK, workers.

What about holiday and sick pay?

From April 2026 the Employment Rights Bill will also establish a new Fair Work Agency with more powers to tackle employers underpaying workers and failing to pay holiday and sick pay.

Employment Rights Minister Kate Dearden says: "This government is taking direct action to ensure workers get every penny they’ve earned, and to put an end to bad businesses undercutting good ones.

"We are proud to have delivered a strong minimum wage and enforcing it thoroughly is crucial in our mission to put pounds back in your pocket."

Britain will turn the corner this year. We are:

Reducing the average energy bill by £150 from April

Freezing rail fares for the first time in 30 years

Raising the National Minimum Wage

We are making progress to deliver real change across our country

— UK Prime Minister (@10DowningStreet) January 5, 2026

Are tips counted as part of National Minimum or Living Wage? 

"If you receive tips at work, they cannot legally count towards your National Minimum Wage or National Living Wage rate," says the government guidance.

"If tips are counted as part of your pay and you rely on them to bring your pay up to the National Minimum or Living Wage pay rate, then you could be underpaid and not receiving the wages you are legally owed. "

Is an employer allowed to deduct the cost of work wear or tools from wages? 

No. If your employer has deducted from your wages, or you’ve had to pay for the cost of items connected with your job, then you may have been underpaid. Examples include uniform, items of clothing to meet a required dress code, safety clothing or tools. Deductions or payments for items connected with the job must not take you below the National Minimum or Living Wage rates for any given pay period.  

Should I get paid for travel while I’m working?   

Time spent travelling between different assignments whilst at work is time spent working. You should be paid at least the National Minimum Wage or National Living Wage for this travelling time.  

But, time commuting to and from your regular place of work isn't usually included.

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What to do if you think you are not being paid the minimum wage

Think you might be being underpaid? Your employer could owe you back pay.  Report this to HMRC  or  call the Acas helpline  for confidential advice.  

If workers suspect they are being underpaid, they can also visit gov.uk/checkyourpay to find out more about what they can do.

Workers visit the Acas website for free, impartial and confidential advice or complain to HM Revenue and Customs (HMRC) at Pay and work rights helpline and complaints

The minimum wage law applies to all parts of the UK.

Niall Mackenzie, Acas Chief Executive, says: "Not only is it important for employers to pay the correct minimum wage rates, it is also the law.

"Failing to do so can result in grievances and potentially legal action, including costly employment tribunals, as well as being named and shamed.

"Acas has advice on how employers can ensure they calculate the correct rate to pay their workers and what employees should do if they think they are not being paid the correct amount."