What Is Minimum Wage in the UK: Current Rates & London Wage Guide

The minimum wage in the UK is currently £12.71 for those aged 21 and over, although it is reviewed and adjusted annually. 

However, not everyone is on the same minimum wage. For example, people in London may receive a slightly higher rate, while those younger than 21 or on an apprenticeship have an adjusted wage as well. 

To understand what the minimum wage is, how it compares to a living wage, and when you can expect it to go up, keep reading below. 

What is Minimum Wage?

Minimum wage is the legal minimum amount an employer can pay their employees for the hours they work. 

In the UK, the government sets out two minimum wage rates – the National Minimum Wage and the National Living Wage. Which one you earn depends on several factors, such as age, employment status, and whether you’re on an apprenticeship or full-time employment. 

National Minimum Wage vs National Living Wage

The National Minimum Wage and National Living Wage are both legal minimum pay rates set out by the UK government. So, how do they differ? Let’s take a look. 

First, the National Minimum Wage applies to younger workers, typically those below the age of 21, and those on apprenticeship courses. Then, the National Living Wage is paid to those over the age of 21 working in eligible roles or businesses. 

The Real Living Wage is a voluntary rate that is higher than the national minimum to account for the real cost of living – bills, food prices, electricity, etc. While employers are encouraged to pay their staff this wage, they aren’t legally obliged to. 

What Is the Current Minimum Wage?

The current National Minimum Wage for employees in the UK is £12.71 (2026), provided they’re in the 21 and over age bracket. 

However, this changes depending on your location, age, employment status, and, to account for the National Living Wage, if applicable. So, what are all the different rates? They include: 21 and over, 18 to 20, under 18, living wage, apprentice wage, and London Living Wage. 

We put together a handy table to break down all these different wages and what they mean financially. Check out the table below.

For those on apprenticeships who are aged 19 or over or have completed their first year, you will usually be paid the minimum wage for your age group. 

Why Does the London Minimum Wage Differ?

With living costs rising each year across the UK, you may be wondering why the London wage is different to elsewhere – it all comes down to a higher cost of living. 

Data from the Trust for London shows the average family (two parents, two children) in London needs to earn at least £41,600 a year to reach Minimum Income Standards. For the rest of the UK, families need £34,700 annually, which is around 20% less than those in London. 

The same data shows the discrepancy is even larger for single parents living in London. When compared to the rest of the UK, the cost of living is 57% higher for single-parent households in London.

To account for the difference in living costs in the country’s capital, employers are encouraged to pay the London Living Wage. However, it’s not a legal requirement. 

When Does the Minimum Wage Go Up in the UK?

In the UK, the minimum and living wage are reviewed and adjusted annually, with the rate increasing by 1 April each year. 

The Low Pay Commission looks at inflation, cost of living, and the current economy to put together recommendations for the government on changes to the minimum wage. The government uses these to inform decisions on wage increases. 

Each year, the government announces the planned increases before April 1 to allow employers time to make the necessary changes.

What Happens if Employers Do Not Pay Minimum Wage?

The National Minimum Wage is a legal requirement for all employers to pay their employees across the UK. If they don’t pay it, they’re breaking the law and could face severe penalties. 

• Backdated Payments: Employers are required to pay back all mispaid wages in full. These will be calculated based on the current legal minimum wage, regardless of when the underpayment occurred. 
• Government Penalties: A Notice of Underpayment can be issued by HMRC to employers found at fault for underpaying employees. In this case, they could face a 200% penalty of total arrears and a £20,000 fine for each affected employee. 
• Tribunals & HMRC Cases: Employees can raise a complaint with HMRC, who will then investigate the claim. There’s also the option to take the case straight to an Employment Tribunal claim for unlawful deduction of wages.

If companies are found to be underpaying their employees, it’s common for HMRC to name them in public access documents. These can be picked up by the press, leading to national coverage in a ‘name and shame’ type story. 

Haggards Crowther Ensures Your Payroll Stays Legally Compliant

When you own your own business, there are plenty of payments to keep track of. Paying your employees is one of the most important, and we’re here to help you do it the right way. 

With us, you get dedicated outsourced payroll management from a team of expert, chartered accountants. We calculate legally compliant wages for you, provide wage slips to employees, and liaise with HMRC on your behalf. 

Get in touch with us today to see how we can save you time and energy by taking care of your payroll for you. You can reach us on 020 7384 0920 for the Parsons Green team, or 020 7384 4898 for our Putney office. Alternatively, send an email to enquiries@haggards.co.uk.