National Living Wage to go up in 2025

national living wage national minimum wage increase 2025

In April 2025, the salaries of over three and a half million employees with low income is expected to increase.

In her first budget chancellor Rachel Reeves officially announced that the national minimum wage for those between 18 to 20 years old will experience a 16% increment while the national living wage for individuals over the age of 21 will see a 6.7% rise.

This is the biggest increase ever recorded, and marks the initial progress towards reaching the government’s objective of establishing a sole adult rate.

In addition, a significant number of employees (approximately 500,000) who work for employers who pay the voluntary real living wage, will get a higher hourly wage with a 6.7% increase.

Every tax year, the government establishes the pay rates based on recommendations from the Low Pay Commission which is an independent group.

Baroness Philippa Stroud, Chair of the LPC, said:

“The Government have been clear about their ambitions for the national minimum wage and its importance in supporting workers’ living standards. At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years, and the challenges that has created alongside other pressures to their cost base.

It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors. These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”

How much is the national living wage from April 2025

From 1st of April 2024, workers who are 21 years old or above can now receive the national living wage.

Employers paying the national living wage in the 2024/2025 tax year currently use a rate of £11.44 per hour.

The national living wage will rise to £12.21 (£0.77 per hour) from April 2025 which is a 6.7% increase.

This is worth £125.46 more per week or £1,505.54 per annum for a full time worker working 37.5 hours per week.

How much is the national minimum wage from April 2025

Employees who are younger, specifically those between the ages of 16 and 20, are entitled to receive the national minimum wage.

The current national minimum wage for individuals aged 18, 19, and 20 is £8.60, with an upcoming increase to £10 per hour in April 2025.

This gives people who are being paid the NMW and employed full-time an increase in their wages of around £2,500 in the upcoming 2025/2026 tax year.

The national minimum rate for 16-17 year olds is improved by 18% up to £7.55 per hour.

The apprentice rate, that is applicable to qualified individuals aged under 19 or those who are over 19 in their first year of an apprenticeship, will benefit from a rise from £6.40 to £7.55, showing an 18% growth.

What is the real living wage from April 2025?

The Living Wage Foundation charity oversees the Real Living Wage, an unofficial hourly pay rate.

The target audience for this scheme is individuals who are 18 years and older in the United Kingdom.

However, it is not mandatory by law and companies have the option to decide whether to provide payment for it.

According to the charity, the real living wage is received by over 475,000 workers employed by 15,000 different companies.

The London Living Wage, which is the rate for employees in London, will see an increase of 70p (5.3%), bringing it to £13.85 per hour.

The real living wage rate in the rest of the UK will increase by 60p (5%), bringing it to a total of £12.60 per hour.

Katherine Chapman, Living Wage Foundation Director, said:

“Low paid workers have been hardest hit by the cost-of-living crisis and are still struggling to stay afloat amidst persistently high prices. The real Living Wage remains the only UK wage rate calculated based on actual living costs, and the new rates announced today will make a massive difference to almost half a million workers who will see their pay increase.

It’s a challenging time for businesses too, which is why it is so encouraging to see the Living Wage movement continue to grow at pace. This year, we reached the major milestone of 15,000 accredited Living Wage Employers – with half of them signing up since 2021. Employers who want to go beyond the Government’s minimum wage and ensure their workers are paid in line with the real cost of living can look to these leading employers and accredit with the Living Wage Foundation.”

Does my employer have to pay the National Minimum Wage or National Living Wage?

It is considered a criminal act for employers to not pay their workers the appropriate National Minimum and Living Wages.

These rates are applicable to employees, regardless of their payment structure or hourly wage and HMRC can impose penalties on employers who fail to pay the accurate amount.

If you believe that you are receiving incorrect payment and you can’t rectify the issue with your employer in the first place, you have the option to file a complaint through the HMRC website at https://www.gov.uk/government/publications/pay-and-work-rights-complaints.

You can also find further guidance from Acas, experts in the workplace.

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