The national living wage may rise by up to 65p an hour next year, according to new estimates from the Low Pay Commission (LPC).

In its latest guidance, the LPC said the minimum wage for those aged 21 and over is likely to increase to £12.71 an hour in April 2026. This projection is based on maintaining the Government’s target for the wage to stay above two-thirds of median earnings.

The final figure could be as high as £12.86 or as low as £12.55, depending on economic conditions over the coming year.

The national living wage currently stands at £12.21 an hour. Each year, the LPC advises ministers on recommended changes to wage rates, with the Government setting new rates the following April.

Deputy Prime Minister Angela Rayner and Business Secretary Jonathan Reynolds said in a letter to the LPC that the next recommendation must reflect the cost of living while supporting both workers and employers.

They wrote: “We are asking the LPC to recommend a national living wage rate that is at least two-thirds of UK median earnings for workers aged 21 and over. This should also take into account the cost of living, employment impacts and wider economic trends.”

The Government said it remains committed to delivering what it calls “a genuine living wage”.

Ministers are also looking at removing the age banding within minimum wage rules, which currently set lower rates for younger workers. The LPC has been asked to consult on reducing the gap between the national living wage and the minimum wage for 18 to 20-year-olds, which is currently £10 per hour.

The minimum wage for those under 18 and apprentices currently stands at £7.55.

The LPC is due to report back in October with its final advice for 2026.

Think tank the Resolution Foundation said the Government’s approach appears cautious despite its ambitious language.

Nye Cominetti, principal economist at the foundation, said: “Despite the Government’s ambitious language around delivering a genuine living wage, the new remit for the Low Pay Commission represents a steady-as-she-goes approach following faster increases in recent years.

“This caution is warranted given worrying labour market data, in part caused by the increase in employer national insurance contributions earlier this year.”