National Minimum and Living Wage Increases: What You Need to Know for April 2025
From 1 April 2025, millions of workers across the UK will see their pay increase as the new National Minimum Wage and National Living Wage rates come into effect.
These changes will impact both employers and employees, making it essential to understand what the new rates are, who is entitled to them, and what they mean in practice.
Whether you’re an employee ensuring you’re fairly paid or an employer protecting your business from legal complications, this guide covers everything you need to know about the upcoming wage increases.
What Are the National Minimum and Living Wages?
The National Minimum Wage (NMW) is the legal minimum hourly pay for most workers aged 16 and over. The rate you are entitled to depends on your age and employment status, such as whether you’re an apprentice.
The National Living Wage, introduced in 2016, is a higher rate specifically for workers aged 21 and over. The aim of this rate is to reflect the higher cost of living for adults.
Both rates are set by the government and reviewed annually. Rates are typically increased each April to reflect changes in the cost of living.
Who Is Entitled to the Minimum Wage?
All employees and workers in the UK are entitled to get the National Minimum Wage or National Living Wage. This applies to:
- Full-time, part-time, and casual workers.
- Apprentices (specific rates apply).
- Agency and zero-hours contract workers.
- Piece-rate workers (paid by the amount of work done rather than by the hour).
- Overtime and holiday pay must also meet minimum wage rules.
However, some workers are not entitled to the minimum wage such as:
- Self-employed individuals
- Company directors
- Volunteers (by choice)
- Students on work experience or placements as part of a course.
- A family member living at home and working for the family business
- Those under school leaving age
If you’re unsure whether you or your employees are entitled to the minimum wage, you can find more information on the ACAS website.
Current Wage Rates since April 2024
The current minimum and living wage rates in effect until 1 April 2025 are:
- 21 and over: £11.44 per hour
- 18 to 20 year-olds: £8.60 per hour
- Under 18s: £6.40 per hour
- Apprentices: £6.40 per hour
New Wage Rates from 1 April 2025
From 1 April 2025, wage increases will come into force for employees across all industries. The new minimum and living wage rates will be:
- National Living Wage (21 and over): £12.21 per hour (an increase of £0.77)
- 18 to 20 year-olds: £10 per hour (an increase of £1.40)
- Under 18: £7.55 per hour (an increase of £1.15)
- Apprentices: £7.55 per hour (an increase of £1.15)
Employers can also choose to pay more than the minimum wage.
When Do the New Rates Apply?
Employees become entitled to the new minimum or living wage rates when:
- The new rates take effect (1 April 2025)
- They age into a new pay band (e.g., turning 21)
- An apprentice becomes entitled to minimum wage (e.g. they complete their first year and are 19 or over)
However, the increased wage may not apply immediately — it starts from the next pay reference period.
The pay reference period is the period of time the pay covers (e.g. daily, weekly, or monthly). It cannot be longer than a month.
For example, if you’re paid monthly from 6 March to 5 April, you will remain on the old rate until 5 April. The new rate will apply from 6 April onwards.
How the Wage Increase Impact Employees?
For workers, the increase means higher pay, which is particularly beneficial during times of rising living costs.
Ensuring You’re Paid Correctly
Employees should check their payslips after 1 April 2025 to ensure their employer has updated their hourly rate in line with the new wage. Your gross pay (before tax) divided by your hours worked should meet or exceed the minimum wage.
This can be checked using the National Minimum and Living Wage calculator on GOV.UK.
What If You’re Underpaid?
It is against the law for employers to pay less than the National Minimum or Living Wage. If you suspect you’re being paid less than the minimum wage, you can:
- Check your contract and payslips to confirm the rate.
- Raise the issue informally with your employer.
- Make a formal complaint to your employer by raising a grievance
If you cannot resolve the issue with your employer, you can take legal action against them. You can either:
- Make a claim to an employment tribunal
- Make a formal complaint to HMRC, which enforces minimum wage rules.
If you are underpaid, you can either take legal action through an employment tribunal or report it to HMRC — but not both.
What Do the Wage Increases Mean for Employers?
For businesses, the wage rise means increased payroll costs and additional administrative responsibilities.
Review Payroll and Contracts
Employers must review their payroll systems and ensure all employees are paid in line with the new rates from 1 April 2025. This includes:
- Updating employee contracts where pay rates are specified.
- Ensuring overtime and bonuses do not reduce the effective hourly rate below the minimum wage.
- Checking that uniform or equipment deductions do not push wages below the minimum threshold.
Risks of Non-Compliance
Employers who fail to pay the correct minimum wage face serious consequences, including:
- Penalties of up to 200% of the unpaid wages (capped at £20,000 per employee)
- You company name could be published by HMRC if you are considered a serious offender. This can cause reputational damage and risks press attention.
- Employee claims for unlawful deductions or back pay.
To avoid these risks, employers should audit their pay records and address any discrepancies promptly.
Common Pitfalls That Lead to Underpayment
Both employees and employers should be aware of common mistakes that can lead to underpayment:
- Incorrect apprentice rates – Apprentices aged 19 or over are only entitled to the lower apprentice rate during their first year. After that, they must be paid the correct wage rate for their age.
- Uniform and work-related costs – If employers require staff to pay for uniforms, tools, or training, these costs cannot reduce their pay below the minimum wage.
- Unpaid working time – Time spent on training or travel between work locations must be included in wage calculations.
Tips to Prepare for the April 2025 Changes
Whether you’re an employer or an employee, here’s how to prepare:
For Employees:
- Check your pay after 1 April 2025 to confirm you’re receiving the correct rate.
- If you’re unsure, use the National Minimum and Living Wage calculator on GOV.UK to verify your entitlement.
- Speak to your employer or seek advice if you have concerns.
For Employers:
- Review your payroll and pay rates to ensure compliance with the new wages.
- Communicate clearly with employees about their new pay rates.
- Keep accurate records of pay and working hours to demonstrate compliance.
Final Thoughts
The April 2025 minimum and living wage increases are designed to ensure fair pay for workers, but they also place legal responsibilities on employers.
For employees, understanding your entitlement and checking your pay ensures you are being fairly compensated. For employers, keeping accurate records and meeting the new rates will protect your business from fines and legal issues. For tailored guidance on minimum wage compliance, consider seeking professional advice.
By staying informed and prepared, both employees and employers can navigate these wage changes effectively.
