Starting 1 April 2025, workers across the United Kingdom will see an increase in their National Minimum Wage (NMW) and National Living Wage (NLW) rates.
These changes are part of the UK government’s annual review, aimed at supporting individuals in coping with rising inflation and the cost-of-living crisis.
This guide provides a full breakdown of the new 2025 wage rates, eligibility, how much workers can expect to earn, and how employers are expected to comply.
What’s New in 2025?
The 2025 wage increase marks one of the largest annual percentage hikes in recent years, particularly for younger workers and apprentices.
One of the biggest changes is the expansion of the National Living Wage, which now applies to all workers aged 21 and over, rather than the previous threshold of 23+.
This shift ensures more people are earning closer to a livable wage and promotes wage equity for younger employees.
New Minimum Wage Rates for 2025
Below is a table comparing the 2024 and 2025 wage rates, highlighting the increase in hourly pay and the percentage change for each age group and category:
| Category | 2024 Rate (£/hour) | 2025 Rate (£/hour) | Increase (£) | Percentage Increase |
|---|---|---|---|---|
| National Living Wage (Age 21+) | £11.44 | £12.21 | £0.77 | 6.7% |
| 18 to 20-Year-Olds | £8.60 | £10.00 | £1.40 | 16.3% |
| 16 to 17-Year-Olds | £6.40 | £7.55 | £1.15 | 18.0% |
| Apprentices | £6.40 | £7.55 | £1.15 | 18.0% |
Additionally, the accommodation offset rate, which applies when an employer provides living accommodation, has increased from £9.99 to £10.66 per day.
Who Is Eligible for the New Wage Rates?
The new wage rates are legally binding and apply to most types of workers in the UK. This includes:
- Full-time and part-time employees
- Casual labourers (e.g., agency workers or seasonal workers)
- Zero-hour contract workers
- Apprentices (based on age and stage of apprenticeship)
- Interns or trainees who are not part of a formal education course
National Living Wage is now for:
- Anyone aged 21 and over
National Minimum Wage applies to:
- Workers under 21
- Apprentices, under specific conditions
Impact on Take-Home Pay
The changes translate to a substantial increase in take-home pay:
- A full-time worker aged 21+ working 37.5 hours per week will now earn £23,779.50 annually, up from £22,338.00.
- An 18 to 20-year-old working the same hours will earn around £19,500 per year, compared to last year’s £16,770.
- For 16 to 17-year-olds, this equals an annual salary of around £14,715, up from £12,480.
These boosts in pay aim to close the wage gap between younger and older workers and support those entering the workforce.
Employer Obligations in 2025
Employers are legally required to:
- Pay the correct minimum rate based on the employee’s age and status
- Update payroll systems to reflect the new wage rates
- Display wage rate updates where necessary for transparency
- Maintain accurate records to demonstrate compliance if audited
Failure to comply may result in fines of up to £20,000 per worker and public listing on the government’s naming and shaming list.
The National Minimum Wage 2025 changes bring meaningful pay rises for millions of workers across the UK. With the National Living Wage now covering ages 21+ and younger age groups seeing double-digit increases, the wage adjustments reflect an effort to provide more equitable and livable earnings amid ongoing economic pressures.
Workers are advised to check their National Insurance age category, review pay slips, and ensure they’re receiving the correct amount. Meanwhile, employers must update payroll processes and remain compliant to avoid severe penalties.
FAQs
Does the new National Living Wage apply to 21-year-olds in 2025?
Yes, in 2025 the National Living Wage now applies to all workers aged 21 and over, instead of 23+ as in previous years.
How often does the UK review minimum wage rates?
Minimum wage rates are reviewed annually, typically coming into effect on April 1st of each year.
What happens if an employer pays less than the legal wage?
Employers who fail to pay the minimum wage can face legal action, fines, and be required to pay back the difference to affected workers.