Low Pay Commission Remit & National Living Wage Forecast (August 2025)

The Government has asked the LPC to: 

• Recommend a National Living Wage rate for April 2026 that does not fall below two-thirds of UK median earnings. 

• Review youth rates, including the potential merging of the 18–20 band into the main NLW rate. 

• Review the accommodation offset. 

This remit is consistent with the previous Government’s direction and confirms a continuation rather than a departure. Importantly, the LPC is also asked to consider wider economic pressures and labour market conditions in its final recommendations. 

“The ambition behind the National Living Wage is right – but the pace must be sustainable. We’re calling for the LPC to carefully consider wider economic challenges and employment impacts when recommending future increases.” 

— Kate Nicholls, Chair, UKHospitality 

Kate Nicholls, UKHospitality Chief Executive, gave oral evidence to the LPC earlier this year. 

We submitted detailed written evidence outlining the cost pressures and labour challenges facing the sector. 

We’ve hosted in-person visits and roundtables with LPC Commissioners across the UK in Exeter, London, Dundee, Swansea and Newcastle. At those meetings members have reiterated:  

• The impact of the April 2025 NLW increase to £12.21, including reduced hours and squeezed youth employment. 

• Cumulative pressures from employer National Insurance Contributions and wider cost inflation. 

• Concern over the proposed convergence of the 18–20 age band with the main NLW. 

• That the Commission should adopt a cautious and flexible approach, mindful of the fragility of the labour market.