National Living Wage To Rise By 6.7% In April 2025

/ employment

The Government has announced the rates of the National Living Wage and National Minimum Wage which will come into force from April 2025 and is set to be worth an extra £1,400 per year for an eligible full-time worker. The move comes in as part of the government's focus on workers' rights and pay, with the Low Pay Commission (Commission) having been tasked to review its wage setting process to ensure that the cost of living is reflected.

What is the minimum wage and who is eligible?

The minimum wage is the minimum hourly rate employees must receive for their services.

There are two versions of it: the National Minimum Wage (NMW), for people of school leaving age (which is broken down into separate amounts for 18-20-year olds, under 18s and apprentices); and the National Living Wage (NLW), for those aged 21 and over.

Every worker is entitled to it, whether they are full-time, part-time, casual labourers, agency workers or apprentices.

From 1 April 2025 there will be:

  • a 77p, or 6.7 per cent, increase to the NLW for those aged 21 and over (from £11.44 to £12.21 per hour)

  • a £1.40, or 16.3 per cent, increase for those aged 18-20 (from £8.60 to £10.00 per hour), and

  • a £1.15, or 18 per cent, increase for those aged 16-17 and apprentices (from £6.40 to £7.55 per hour).

In determining the recommended NLW rate, the Commission for the first time considered the cost of living, including expected trends in inflation up to March 2026. It believes that the increase to the NLW will meet the government’s intention for this rate to reach at least two-thirds of median earnings in 2024. The increase in the rate for 18 to 20 year olds, which is the largest increase to date, narrows the gap with the NLW, in anticipation of the adult rate being extended to 18 year olds in the future.

Bigger Picture

The change to the NMW is part of the government's wider plans to reform workplace rights, something that was made apparent in its pre-election manifesto. These increases will see a total of 3.5 million workers receiving a pay rise.

If you would like more information or if you are an employer who wants support through the upcoming changes, please contact Arvin Sandhu by email or on 01494 521301.