The National Living Wage will rise from £12.71 to £13.21 an hour on 1 April 2027, an increase of 50p or 3.9%. The government confirmed the new rates on 28 October 2026, accepting the Low Pay Commission’s recommendations. The 18 to 20 rate rises to £11.27 and the rate for 16 to 17 year olds and apprentices rises to £8.31. For businesses that buy cleaning, front of house, hospitality or retail staff, this feeds directly into contract prices from next spring, so now is the time to plan.
This guide sets out the new rates, shows what an hour of labour really costs an employer, and explains how to budget for outsourced services.
Minimum wage rates: April 2026 vs April 2027
| Rate | From April 2026 | From April 2027 | Increase |
|---|---|---|---|
| National Living Wage (21 and over) | £12.71 | £13.21 | +50p (3.9%) |
| 18 to 20 year old rate | £10.85 | £11.27 | +42p (3.9%) |
| 16 to 17 year old rate | £8.00 | £8.31 | +31p (3.9%) |
| Apprentice rate | £8.00 | £8.31 | +31p (3.9%) |
| Accommodation offset (per day) | £11.10 | £11.53 | +43p |
Source: GOV.UK, “LPC recommendations take the National Living Wage to £13.21”. The age threshold for the National Living Wage stays at 21 in 2027. The government still intends to lower it to 18 over time, but the Low Pay Commission recommended pausing alignment for 18 to 20 year olds this year.
The real Living Wage is higher
The National Living Wage is the legal minimum. The real Living Wage is a voluntary rate set each year by the Living Wage Foundation based on the cost of living. For 2026 to 2027 it is £14.10 an hour across the UK and £15.45 in London, and accredited employers have until 1 May 2027 to apply it. Many public sector bodies, universities and large companies require their cleaning and security contractors to pay it.
What an hour of labour really costs
The hourly wage is only part of the cost of employing someone. Holiday pay, employer National Insurance, pension contributions and sick pay all sit on top. A simple worked example for a full-time worker aged 21 or over on the National Living Wage:
| Cost element | April 2026 | April 2027 |
|---|---|---|
| Hourly wage | £12.71 | £13.21 |
| Holiday pay (5.6 weeks, about 12.07%) | £1.53 | £1.59 |
| Employer pension (3% of qualifying earnings, approx.) | £0.29 | £0.30 |
| Employer National Insurance (15% above the threshold, approx.) | £1.20 to £1.55 | £1.30 to £1.60 |
| Approximate employment cost per hour | £15.70 to £16.10 | £16.40 to £16.70 |
Figures are illustrative. Employer National Insurance depends on each worker’s earnings and the Employment Allowance, and pension costs depend on the scheme. Before any training, supervision, uniforms, equipment, insurance, management and margin, the direct cost of a worker on the minimum rate will be around £16.40 to £16.70 an hour from April 2027 for a full-time worker.
This is why independent pricing guides now treat cleaning quotes at or below about £14 per cleaner hour as a red flag. A contractor quoting below the cost of employment is either not paying the legal minimum for all hours, cutting corners on holiday and sick pay, or will come back for an increase. See our guide to commercial cleaning costs in the UK for current market rates.
Other cost changes to budget for
- Statutory Sick Pay: since 6 April 2026, SSP is paid from the first day of sickness to all employees, with no lower earnings limit. Our SSP changes guide explains the cost impact for shift-based teams.
- Employment Rights Act 2025: further changes in 2027, including guaranteed hours for low-hours workers, will affect how flexible staffing is organised. See our Employment Rights Act guide.
- Right to work checks: from 1 October 2026 liability extends to more working arrangements. See our right to work checks guide.
How to budget for outsourced services in 2027
- Check your contract’s price review clause. Most cleaning and staffing contracts allow the supplier to pass through statutory wage increases. Know the date and the formula.
- Ask for an open-book breakdown. A good contractor will show how much of the hourly rate is wages and on-costs versus overheads and margin.
- Plan for the increase now. A 3.9% rise on the labour element of a contract is a reasonable planning figure, plus any real Living Wage commitments.
- Look at the specification, not just the rate. Changing frequencies, using day cleaning or combining services under one provider can offset some of the increase without cutting quality.
- Avoid the cheapest quote trap. Unrealistically low rates usually lead to staff turnover, missed shifts and poor standards.
If you are reviewing your provider, our FM tender brief guide shows how to ask for transparent pricing.
Planning your 2027 budget?We price cleaning and staffing contracts openly, with clear wage and on-cost breakdowns.
Frequently Asked Questions
What is the National Living Wage in April 2027?
£13.21 an hour for workers aged 21 and over, up from £12.71.
What is the minimum wage for 18 to 20 year olds in 2027?
£11.27 an hour from 1 April 2027, up from £10.85.
When was the 2027 rate announced?
The government confirmed it on 28 October 2026, accepting the Low Pay Commission’s recommendations.
Is the real Living Wage the same as the National Living Wage?
No. The National Living Wage is the legal minimum. The real Living Wage is a voluntary, higher rate set by the Living Wage Foundation: £14.10 in the UK and £15.45 in London for 2026 to 2027.
How much does an hour of cleaning really cost?
The direct employment cost of a full-time worker on the National Living Wage is roughly £16.40 to £16.70 an hour from April 2027, before supervision, equipment, overheads and margin.
Talk to WWSG
WWSG provides cleaning, front of house and staffing services with fair, transparent pricing. Get in touch to plan for April 2027.