National Living Wage to increase to £12.21 in April 2025

The NLW for those aged 21 and over will increase by £0.77 to £12.21, 1st April 2025 onwards.
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The Government has accepted the Low Pay Commission’s (LPC) recommendations on the rates of the National Minimum Wage (NMW), including the National Living Wage (NLW), which will apply from 1st April 2025.

The National Living Wage for those aged 21 and over will increase by £0.77 to £12.21, a 6.7% rise.

The rate for 18 to 20-year-olds will increase by £1.40 to £10.00, representing a 16.3% rise.

For 16 to 17-year-olds, the rate will go up by £1.15 to £7.55, an 18.0% increase, which is the same rise as the apprentice rate, now also set at £7.55.

The accommodation offset will increase by £0.67 to £10.66, a 6.7% increase.

The recommended NLW rate is expected to equal two-thirds of median earnings and to have the highest real value in the history of the UK’s minimum wage.

The increase in the 18 to 20-year-old rate narrows the gap between that and the NLW, in anticipation of the adult rate being extended to 18-year-olds in future years.

Baroness Philippa Stroud, chair of the LPC, said: “The Government have been clear about their ambitions for the National Minimum Wage and its importance in supporting workers’ living standards.

“At the same time, employers have had to deal with the adult rate rising over 20% in two years, and the challenges that has created alongside other pressures to their cost base.

“It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors.

“These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.

“The data show some signs of employers finding it harder to adapt to minimum wage increases. The tightening of the labour market since the pandemic has unwound, but the overall picture is similar to 2019.

“The economy is expected to grow over the next year, although productivity growth remains subdued.

“We look forward to continuing our work next year as the detail of the Make Work Pay plan is elaborated upon.

“The NMW is a major part of the Government’s ambitions for the future of the labour market, and it is important that it continues to be informed by the expertise and consensus-building the LPC provides.”

The LPC’s recommendations were based on consultation with employers, workers, representatives of both groups and other expert bodies, as well as a series of regional visits.

The recommended increase in the 16 to 17-year-old rate restores it to its original value relative to the adult minimum wage.

In line with previous recommendations, the Apprentice Rate will remain equal to the 16 to 17-year-old rate.

Jon Richards, assistant general secretary at UNISON Union, said: “This much-needed boost will see millions of workers struggling a little less from next spring.

“With more in pay slips, hard-earned cash will go further, easing the pressure on stretched household finances.

“Many of the employees delivering essential services and caring for those unable to look after themselves will benefit from the rise.

“They’ll be able to spend more within their communities, helping local economies grow.

“But as it stands, the new legal minimum is more than the current lowest hourly rate in the NHS, universities and some other public services. 

“This will give employers multiple headaches.

“To avoid this in the NHS, the government should ditch the outdated pay review body process and start talks with unions now.

“This will ensure wages remain competitive for all employees, so staff don’t leave the NHS.”

Zarah Choudhary

Zarah Choudhary is a Reporter for Workplace Journal and The Intermediary

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