National Living Wage rises to £12.21 and other minimum wage rates increase

The National Living Wage rose to £12.21 an hour on Tuesday 1 April 2025, the Low Pay Commission said, an increase of £0.77 or 6.7 per cent on the previous rate of £11.44¹. The rate applies to workers aged 21 and over, an age threshold that came down from 25 to 23 in April 2021 and from 23 to 21 in April 2024¹. The other statutory minimum wage rates also rose on the same date¹.

The rates from 1 April 2025 are set out below¹.

The Accommodation Offset, an allowable deduction from wages for accommodation for each day of the week, rose to £10.66 per day¹. The Low Pay Commission said the increases implement recommendations it made to the Government in autumn 2024, which the Government accepted in the Autumn Budget¹. For an NLW worker working 37.5 hours a week, the Commission said the increases raise annual gross pay by £1,505.54 and monthly gross pay by £125.46¹.

Baroness Philippa Stroud, Chair of the Low Pay Commission, said:

The Commission said the rate recommendations were agreed unanimously, and that it recognises the increases come at a time when employers are facing increasing pressure¹. The National Living Wage is the statutory minimum wage for workers aged 21 and over, and is separate from the UK Living Wage and London Living Wage calculated by the Living Wage Foundation, which are voluntary benchmarks applying to workers aged 18 and over¹. The Government has stated an ambition to reduce the NLW age threshold from 21 to 18, and the Commission said it will consult next year on the pathway to that goal¹.

Why it matters for households

The rates set a legal pay floor for the workers they cover from 1 April 2025, so anyone paid at or near the minimum saw their hourly rate change on that date¹. The size of the change differs by age: the 18-20 rate rose by 16.3 per cent and the 16-17 and apprentice rates by 18.0 per cent, against 6.7 per cent for the NLW¹. The accommodation offset affects workers whose employer provides accommodation and deducts it from wages, with the maximum daily deduction rising to £10.66¹.

The increase took effect at the same time as other April changes. Working-age benefits rose by 1.7 per cent, in line with September 2024 inflation, while pension-age benefits rose by 4.1 per cent under the Triple Lock, and Local Housing Allowance rates and the benefit cap were frozen². The Joseph Rowntree Foundation said that by April 2025 CPI was 3.5 per cent, and that a single working-age adult working full time on the NLW reached 76 per cent of its Minimum Income Standard in 2025, down from 77 per cent in 2024⁴. The Economics Observatory noted that the NLW rise came into effect alongside an increase in employer National Insurance contributions from 13.8 per cent to 15 per cent and a lower threshold at which employers start paying them, from £9,100 to £5,000 a year⁵.

What happens next

The Low Pay Commission said it will launch a call for evidence in the coming weeks and hold in-person meetings around the country as it builds evidence for future recommendations¹. It said it will provide its advice to the Government on the NLW and NMW rates to take effect in April 2026 by the end of October 2025³. In August 2025 it published a central estimate that an NLW increase to £12.71, or 4.1 per cent, would keep the NLW at or above two-thirds of median earnings, with a range of £12.55 to £12.86, up from a May 2025 central estimate of £12.65 and a range of £12.50 to £12.80³. It said these figures are indicative only³.