Is Minimum Wage Going Up?

Yes, the National Living Wage (NLW) and National Minimum Wage (NMW) rates are increasing from 1 April 2026. For workers aged 21 and over, the NLW rises to £12.71 per hour, a 4.1% increase on the 2025 rate of £12.21. The 18-20 rate jumps to £10.85 (up 8.5%), while the 16-17 and apprentice rates both go to £8.00. These changes follow recommendations from the Low Pay Commission, which aims to keep the NLW at two-thirds of median hourly earnings. The ONS Annual Survey of Hours and Earnings (ASHE) for 2025 shows median full-time hourly pay (excluding overtime) was £19.67, so the new NLW remains well below that but still represents a real-terms rise for lower-paid workers.

What the 2026 Increase Means for Your Pay

If you work 37.5 hours per week on the NLW, your annual salary would be approximately £24,784.50 (before tax and National Insurance). That is about £975 more than the 2025 equivalent of £23,809.50. However, remember that annual figures assume you are paid for every week of the year and have no unpaid leave. The Income Tax Personal Allowance remains at £12,570, so a full-time minimum wage earner will pay some income tax but no National Insurance on the first £12,570 of earnings.

For part-time workers, the hourly rate is the key figure. Whether you work 10 hours or 40 hours, your employer must pay at least the relevant minimum wage for each hour worked. The GOV.UK guidance is clear: the NLW applies to all workers aged 21 and over, regardless of hours.

Common Myths About Hourly Pay and Overtime

Many UK employees and job seekers misunderstand how hourly rates translate into annual salary, and what rules apply to overtime. Here we debunk three persistent myths using official data.

Myth 1: Overtime Is Always Paid at a Higher Rate

There is no legal right to ‘time-and-a-half’ or double time for overtime in the UK. The only legal requirement is that your average hourly pay across the entire pay period (including overtime hours) does not fall below the National Minimum Wage or National Living Wage. If your contract says you are paid a flat hourly rate for all hours, that is perfectly legal. Some employers offer enhanced overtime rates, but it is not mandatory. Always check your employment contract. For example, NHS pay scales include overtime provisions (often time-and-a-half or double time for certain bands), but this is specific to the NHS Terms and Conditions, not a general right.

Myth 2: Annual Salary Is Just Hourly Rate × 40 Hours × 52 Weeks

Many people assume a 40-hour week is standard, but the ONS defines full-time as more than 30 paid hours per week (or 25 for teachers). The median full-time employee works around 37.5 hours, but this varies by sector. Using 40 hours can overestimate your annual salary. A more accurate conversion uses your contracted hours. For example, if you earn £15 per hour and work 35 hours per week, your annual salary is £15 × 35 × 52 = £27,300. But this assumes no unpaid overtime, no salary sacrifice, and that you are paid for all 52 weeks. Use our salary articles for deeper guidance on calculating take-home pay.

Myth 3: Minimum Wage Applies Equally to All Workers

The NLW and NMW rates depend on age and apprenticeship status. From April 2026:

• 21 and over: £12.71
• 18-20: £10.85
• 16-17: £8.00
• Apprentices (any age, first year): £8.00

If you are 20, your employer can legally pay you £10.85 even if you do the same job as a 21-year-old on £12.71. Also, the ‘accommodation offset’ (the maximum an employer can charge for living accommodation) rises to £11.10 per day. These nuances are often overlooked. The Low Pay Commission’s evidence shows that the 18-20 rate increase of 8.5% is designed to narrow the gap with the NLW, but the age-based structure remains.

How to Use Hourly Rates in Salary Negotiations

When comparing job offers, always look at the hourly rate first, especially if the role involves overtime or shift work. London weighting can add a significant premium. For example, NHS pay scales include Higher Cost Area Supplements (HCAS) for inner and outer London, which can add 20% of basic salary (subject to a minimum and maximum). A job advertised at £12.71 per hour in central London may actually pay more once HCAS is included.

For a quick conversion, remember: annual ≈ hourly × hours per week × 52. But this is a rough guide. Your actual take-home pay depends on tax, pension contributions, student loan repayments, and any salary sacrifice schemes. Our hourly calculator can help you estimate net pay, but always consult official HMRC guidance for precise figures.

Final Thoughts

The minimum wage is going up in 2026, providing a real-terms increase for the lowest-paid workers. However, myths about overtime and salary conversion can lead to confusion. Always check your contract, understand your rights, and use reliable sources like ONS and GOV.UK for benchmarks. For more data on UK earnings, visit our salary data page.