Government lays legislation confirming new National Living Wage and National Minimum Wage rates from 1 April 2025

The government laid legislation on 4 February 2025 confirming new pay floors that take effect from 1 April, according to the Department for Business and Trade, HM Treasury and the Low Pay Commission¹. The National Living Wage for those aged 21 and over rises from £11.44 to £12.21 an hour, a 6.7% increase, which the department says is worth £1,400 a year for an eligible full-time worker¹. The National Minimum Wage for 18 to 20 year olds rises from £8.60 to £10.00 an hour, an increase of £1.40, which the department says will boost the pay of eligible full-time younger workers by £2,500 a year¹.

The apprenticeship rate and the rate for 16 to 17 year olds rise from £6.40 to £7.55 an hour¹. The department says an 18 year old apprentice in an industry such as construction would see minimum hourly pay rise by 18.0%¹.

The department says over 3 million workers in shops, restaurants and workplaces across the UK are set to receive a pay boost from April, and that a further 4 million could benefit from spill-over effects of the increases¹. An impact assessment published the same day shows the reforms will put around £1.8 billion into the pockets of workers over the next six years, according to the department¹. The National Living Wage applies to most workers, while the National Minimum Wage is the minimum an employer must pay per hour for all workers aged below 21¹. The department says this is the first time the National Living Wage has taken into account the cost of living and inflation, and describes it as the first step towards aligning the 18 to 20 rate and the National Living Wage into a single adult rate¹. The National Living Wage is separate from the real Living Wage, which is set by the Living Wage Foundation rather than by government.

The Low Pay Commission chair also said the rates secure a real-terms pay increase for the lowest paid and that substantial increases for young workers make up some of the ground lost against the adult rate over time¹.

Why it matters for households

Anyone paid at or near the legal minimum in the UK is affected from 1 April 2025, when employers must pay at least the new hourly rates¹. For a worker aged 21 or over on the National Living Wage, the hourly rate rises by 77p; for an 18 to 20 year old, it rises by £1.40 an hour¹. The department's £1,400 and £2,500 annual figures are its own estimates for eligible full-time workers and depend on hours worked¹. The government says the Employment Rights Bill is already set to boost the pay of some of the lowest paid workers by up to £600 a year¹. The Minimum Income Standard sets out what the public considers a decent living costs, which is a different measure from the statutory pay floors.

What happens next

The rates take effect from 1 April 2025¹. The government says it will work with HMRC and Acas to engage with businesses, unions and wider society so that employers are aware of the new rates and prepare for payroll changes on that date¹. The Low Pay Commission says it will consult with employers and workers in the coming months on the effects of the changes¹.