Back
Get in Touch Menu

The latest increase to national living wage

28 March 2025

At the end of last year, the government announced new rates for the national living wage. Employers should be mindful that the 2025 rates will come into force from 1 April. Here’s everything you need to know.

The change is in line with the new government’s emphasis on workers’ rights and pay, as part of which the Low Pay Commission (LPC) was tasked to review the process of setting wages. This is to ensure that the National Minimum Wage is aligned with the cost of living.

What is the national living wage?

Employers must pay a minimum on average for hours worked. This applies to all employees, workers and apprentices.

For anyone who is aged 21 or over, this is known as the ‘national living wage’ (NLW).  For anyone under the age of 21 (and over school leaving age), this is known as the ‘national minimum wage’ (NMW).

How much is the national living wage?

Age Band Wage per hour (2024) Wage per hour (2025)
21 or over £11.44 £12.21
18 to 20 £8.60 £10.00
Under 18 £6.40 £7.55
Apprentice £6.40 £7.55

Who does the national minimum wage apply to?

The national minimum wage applies to:

  • employees
  • workers
  • apprentices.

What is an apprentice?

For a person to be an apprentice, they must be:

  • under 19; or
  • 19 or over during the first year of their current apprenticeship agreement.

If neither of these applies, NLW or NMW for the relevant age band must be paid.

When do the new rates apply?

The new rates apply when:

  • the rate is increased by the government (usually in April)
  • the employee turns 18 or 21
  • the apprentice turns 19 and has completed the first year of the current apprenticeship agreement
  • the apprentice – who is already 19 – finishes the first year of the current apprenticeship agreement.

Pay reference period

The higher rate starts to apply from the next ‘pay reference period’ after the increase. This means someone’s pay might not go up straight away.

The ‘pay reference period’ is the period the pay covers. For instance:

  • for daily pay, the pay reference period is one day
  • for weekly pay, the pay reference period is one week
  • for monthly pay, the pay reference period is one month.

The pay reference period cannot be longer than a month.

For example, pay will not go up straight away in the following scenario:

  • There’s a minimum wage rate increase on 1 April
  • The employee’s pay reference period is one month
  • Each pay reference period starts on 16th and ends on 15th
  • The old rate will apply until the next pay reference period starts on 16th
  • Which means:
    • The employee is paid the old rate from 1 April to 15 April
    • The employee is paid the new rate from 16 April to 15 May.

If you and your business require expert guidance on how to navigate any issues you may have encountered, please get in touch – our team will be willing to help.

Contact us

Our Legal 500-rated employment law & business immigration team are experts in guiding businesses of all sizes and backgrounds through a range of issues that may arise.

Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
Contact
Simon Pathé FCILEx
Partner, chartered legal executive
View profile
Related services
Share this article
Resources to help

Related articles

Employment Rights Bill: How will strike action be affected?

Employment & business immigration

There have been some high profile cases of striking across certain industries in the UK in recent times, but with the new Employment Rights Bill, how will strike action be…

Simon Pathé FCILEx
Partner, chartered legal executive

Employment Rights Bill: Making flexible working more accessible

Employment & business immigration

The Employment Rights Bill could bring changes to the way in which employees choose to work by making flexible working more accessible. Flexible working has been a hot topic in…

Simon Pathé FCILEx
Partner, chartered legal executive

Employment Rights Bill: How is fire & rehire changing?

Employment & business immigration

The Employment Rights Bill will be bring changes to the fire and rehire process. The term ‘fire and rehire’ refers to the practice of changing employment terms and conditions through…

Simon Pathé FCILEx
Partner, chartered legal executive
Contact us