21 May 2025

Each year the Low Pay Commission (LPC) consults on the future of the National Minimum Wage (NMW) and National Living Wage rates (NLW) for the following April.

This year is no different, however, as we know, the government has asked the LPC to explore pathways to removing the 18-20 age band, providing NLW entitlement to all workers 18 and over. The consultation is therefore seeking views on exactly how the LPC could lower the age of entitlement to the NLW to 18 year olds.

The current consultation provides two options:

Option one: Reduce the age of entitlement by one age group at a time

  • first extend the NLW to 20 year olds, then 19 year olds, then 18 year olds
  • rates for the remaining age groups (e.g. 18-19 year olds) could be moved closer to the NLW as they prepare to move over
  • would lead to one-off large increases in the wage floor for each age cohort as they move onto the NLW
  • the faster we move to an 18+ NLW, the larger the increases in the wage floor needed
  • this approach would allow government to evaluate the initial impacts on each age cohort after they become eligible for the NLW and adjust our future recommendations accordingly
  • starting by moving older workers onto the NLW would also reflect the differences within the 18-20 age group.

Option two: Align the 18-20 Year Old Rate with the NLW over a number of years (suggested two years, by April 2027, or four years, by April 2029)

  • require the 18-20 Year Old Rate to increase faster than the NLW until the two were equal and the 18-20 Year Old Rate was abolished
  • would require smaller (but still significant) increases spread over a number of years
  • changes to the NLW (whether driven by economic factors or Government policy)
  • larger increases in the NLW would also mean larger increases for 18-20 year olds
  • alignment of the 18-20 Year Old Rate with the NLW by April 2027 would require increases in the region of £1.40 (11-15 per cent) each year for two years
  • alignment of the 18-20 Year Old Rate with the NLW by April 2029 would require increases of around 90 pence (5-9 per cent) each year for four years.

In addition and as usual, the Low Pay Commission is seeking evidence on the broad economic and labour market conditions that workers and businesses are facing, as well as the specific impacts of the rates themselves.

It is particularly interested in evidence on the following:

  • the affordability and effects of an increase in April 2026 to an NLW rate within the range of £12.50 to £12.80 (noting that these figures are indicative only because we don’t have our remit for 2026’s rates yet from the Government)
  • the impact so far of increases in the NLW in April 2025 on workers, employers, the labour market and economy
  • the effect of recent minimum wage increases for younger workers on their employment prospects
  • views on the approaches to lowering the NLW age threshold set out in the annex to this document.

Help shape the future of the National Minimum Wage and National Living Wage rates from April 2026 by responding to our survey. The CIPP policy team will be submitting your feedback in our formal consultation response.


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