UK Govt announced £1,500 Increase to New Minimum Wage Rates: Starting Tuesday, 1 April 2025, the UK Government will raise the National Living Wage to £12.21 per hour. This change is part of a broader move to ensure that workers across the UK receive better pay, especially those in lower-paid jobs. Alongside this, younger workers and apprentices will also see a big increase in their minimum wages.
These changes are based on recommendations made last year by the Low Pay Commission (LPC), which regularly advises the government on fair wage levels.
What Are the New Minimum Wage Rates?
From 1 April 2025, the updated National Minimum Wage (NMW) rates will be:
For Workers Aged 21 and Over
£12.21 per hour – an increase of £0.77 or 6.7%.
For someone working 37.5 hours a week, this means an annual pay rise of over £1,500.
For 18-20 Year Olds
£10.00 per hour – a rise of £1.40 or 16.3%.
For 16-17 Year Olds and Apprentices
£7.55 per hour – both get an increase of £1.15 or 18%.
Accommodation Offset
If accommodation is provided by an employer, they can deduct up to £10.66 per day, up from £9.99.
Why Is This Happening?
The goal is to give real-terms pay increases to low-paid workers and help them cope with the rising cost of living. According to Baroness Philippa Stroud, Chair of the LPC, these new rates are designed to protect the earnings of the lowest-paid workers while also being mindful of the pressures faced by businesses.
The LPC says that although young workers still have a lower minimum wage than older workers, these increases help close the gap. Over time, the government also plans to lower the age threshold for the National Living Wage from 21 to 18, depending on evidence and consultation.
How Will This Affect Workers?
The biggest benefit is a clear pay boost. For example, a full-time worker earning the National Living Wage will now earn £125 more each month before tax.
However, the LPC also warns that it’s important to balance pay increases with job security, especially for younger workers who may be more affected by changes in wage policy. The Commission plans to collect feedback and hold public consultations to guide future wage decisions.
What’s the Difference Between the National Living Wage and the Living Wage Foundation’s Rate?
The National Living Wage (NLW) is set by the government and is legally binding. It currently applies to workers aged 21 and over, and is based on average pay levels.
In contrast, the Living Wage Foundation’s UK Living Wage and London Living Wage are voluntary. Employers can choose to pay these rates, which are higher and based on the cost of living. The NLW is not connected to these voluntary rates.
The rise in the minimum wage from April 2025 is a welcome move for millions of UK workers. With increases across all age groups, the changes aim to support those earning the least while being cautious about the impact on jobs. As the government and LPC continue gathering feedback, more updates can be expected in the coming months.
FAQ’s
What is the new National Living Wage from April 2025?
From 1 April 2025, the National Living Wage for workers aged 21 and over will be £12.21 per hour.
What are the new minimum wage rates for young workers and apprentices?
The new rates are £10.00 for 18-20 year olds, and £7.55 for 16-17 year olds and apprentices.
How much more will a full-time NLW worker earn yearly?
A worker on the new NLW working 37.5 hours per week will earn around £1,505 more annually.
What is the difference between National Living Wage and the Living Wage Foundation’s rates?
The National Living Wage is a legal minimum set by the government. The Living Wage Foundation’s rates are voluntary and based on living costs.
Will the age for National Living Wage eligibility change?
The government aims to lower the NLW age from 21 to 18 in the future, following consultations and evidence.
